Synopsis: The Ujjain administration has proposed a ₹200 crore ‘Temple Bonds’ scheme as a part of a ₹1,100 crore project for the redevelopments of the 11 prominent temples in Ujjain and Agar-Malwar districts, an initiation of the new era of faith-backed investing.
The ancient city of Mahakal is getting ready for the once every 12 years sacred pilgrimage, the Simahastha Kumbh Mela 2028. To build the infrastructure worthy of this scale of the event, the Madhya Pradesh government is now turning to a first-of-its-kind financial instrument which is, ‘Temple Bonds’. The scheme will invite citizens and institutions to directly invest in temple infrastructure projects along with offering principal repayment and interest returns after a fixed tenure.
Temple Bonds: Structure and Terms
The Ujjain administration will raise a ₹200 crore through Temple Bonds which is a part of the ₹1,100 crore redevelopment project and is a unique financial fixed-income debt instrument that offers investors both principal repayment and interest returns. The remaining ₹900 crore in overall ₹1,100 crore project will be funded as ₹275 crore from the Urban Fund Challenge and ₹625 crore through bank financing.
- Key details of the Temple Bonds,
- Issuing Authority: Ujjain Development Authority (UDA)
- Total Bond Size: ₹200 crore, part of ₹1,100 crore redevelopment project
- Repayment Source: The reimbursement for investors is expected to come from the donations and offerings collected at the temples
- Timeline- The expected timeline is the complete issuance of the process by 15 July 2026, and the official launch of Temple Bonds scheduled for 31 July 2026
- Regulatory Approvals Pending: Approvals from SEBI, the state finance department, and law department are underway. The interest rates, minimum investment amounts, and other related terms are yet to be finalised
- Bond Type: Similar in structure of the other Indian municipal bonds is expected
What are Municipal Bonds?
Governed by SEBI, these are debt instruments issued by the urban local bodies such as municipal corporations, city development authorities, and similar civic bodies. Usually when a city issues a municipal bond, it commits to returning the full principal at the end along with paying interest over the bond’s tenure.
Temples Covered Under the Scheme
Temple bonds will help in a sustainable funding mechanism and will further mitigate the requirement of direct government funding. The DPRs (Detailed Project Reports) are being prepared for each temple. The 11 prominent religious sites include,
- Kal Bhairav Temple
- Mangalnath Temple
- Sandipani Ashram
- Navgrah Temple
- The 84 Mahadev temples
- Angareshwar Mahadev temple
- Bhukhi Mata Temple
- Gadkalika Temple
- Siddhavat Temple
- Baglamukhi Temple
- Selected shrines in Agra-Malwa district
MP’s Earlier Win: The Indore Municipal Green Bonds (2023)
The Government of Madhya Pradesh already has a successful municipal bond precedent through the Indore Municipal Corporation (IMC) Green Bond issue of February 2023, which was a well-achieved milestone in Indian municipal finance.
- Key details of the IMC Green Bond,
- Purpose: For the installation of a 60 MW Ground Mounted Captive Solar PV Power Plant at Village Samraj and Ashukhedi District Khargone, Madhya Pradesh.
- Total Issue Size: Up to ₹244 crore
- Coupon Rate: 8.25% per annum payable half-yearly with an effective yield of 8.42% per annum
- Repayment Structure: Separately Transferrable and Redeemable Principal Parts (STRPP) structure was used for these bonds. In this, each NCD (Non-Convertible Debentures) of ₹1,000 was split into four parts of ₹250 each, with different maturity dates, of 3 years, 5 years, 7 years, and 9 years tenure.
- Subscription: Subscribed over 5.91 times on Day 1 and attracting worth ₹661.52 crore
- Listed on: NSE, February 21, 2023
Also Read: FD Rates Revised: 4 Banks Now Offering Up to 8.05% Interest in June 2026
Are Temple Bonds India’s Next Promising Investment?
The combination of security of municipal bonds and the emotional pull of devotion would attract investors towards Temple bonds, here’s how investors can further compare and take informed decisions,
Source: Compiled through various sources
Future Prospects
If these Temple Bonds are successfully launched and subscribed, then it would open a new asset class in India becoming a ‘Faith Infrastructure Bonds’, in which the other pilgrimage economies like Varanasi, Tirupati, Vrindavan, and Ayodhya will likely to replicate this model to fund religious tourism infrastructure through the capital markets and would further lead to transparency of the temple revenues, and reducing the dependency over the direct government funding for the infrastructural development of the temples.
Written by Jahnavi
