Surat Municipal Corporation Launches NCD IPO: Debt-Free with Strong Financials
The Surat Municipal Corporation (SMC) launched its NCD IPO on October 6, 2025, attracting investors looking for high-quality constructions, innovative designs, and high-yield options. This debt instrument showcases the organisation's rock-solid financial position: no debts, substantial cash reserves, and significant revenue growth.
Key Offering Details
The public offering aims at ₹100 crore base size, with the green shoe option bringing the total to ₹200 crore. Each bond has a face value of ₹1,000, offering interest up to 8.16% annually. They span 4 to 5 years, listed on BSE and NSE.
- Issue Open: October 6, 2025
- Issue Close: October 9, 2025
- Minimum Investment: ₹10,000 for (10 NCDs)
- Allotment Basis: First-come, first-served
- Lead Manager: A.K. Capital Services Ltd.
Allocation breaks down as: 60% for institutional investors, 25% for non-institutional investors, and 15% for high-net-worth individuals (HNI).
Outstanding Financial Strengths
As of July 31, 2025, SMC has a debt-free balance sheet with cash and bank balances exceeding ₹1,000 crore, including fixed deposits. This liquidity helps manage debt servicing and supports capital projects.
In FY2025, property tax collections reached 92% effectiveness, fueling a revenue surplus of ₹909 crore above the ₹832 crore from the previous year. This growth stems from higher taxes and user charges.
The agency maintains strong credit ratings at IND AA+/Stable (India Ratings) and CRISIL AA+/Stable, signifying a low risk.
Solid Safeguards for Investors
Repayment security comes from revenue escrow mechanisms and a DSRA covering one year’s interest. These protections shield against cash flow issues, which rarely occur due to SMC's history.
These green municipal bonds fund eco-friendly projects over five years, amounting to around ₹10,000 crore under AMRUT and Smart City missions, like the Dumas sea face and barrage developments.
Reasons to Consider SMC NCDs?
Fixed returns appeal to investors during market fluctuations. SMC's profile outperforms many companies: no legacy debt, consistent cash flow, and excellent ratings. However, reliance on municipal revenues and potential project delays carries minor risks, and no underwriting adds to subscription uncertainty.
Quick, hassle-free online applications via demat accounts using UPI for amounts up to ₹10 lakh are possible.
Established in 1966 under Gujarat laws, SMC manages Surat efficiently. This IPO fund grows and rewards bondholders.
For real estate watchers, these bonds enhance urban infrastructure, raising property values in the diamond city of Surat.