WHAT IS THE RETAIL BOND MARKET OPPORTUNITY

IN a meeting last week, the board of the Securities and Exchange Board of India, the securities market regulator, said that it had approved amendments to the SEBI issue of listing of NCD) Regulations 2021.

- RAJAS KELKAR

The minimum face value of bonds issued through a non-convertible debenture or NCD offer is now reduced to 10,000 from ₹1,00,000 earlier.

For now, the corporate bond market in India is primarily institutional. Large financial institutions like insurance companies and mutual funds buy into corporate bonds through fixed-income funds they manage. The Sebi move allows you to use your broking account to buy bonds listed as securities for trading directly. These are non-convertible debentures that offer a coupon rate and trade for a market value based on the bond duration.

Now, you may wonder about the need to introduce it when barely 3-4% of people own financial assets in India, let alone trade and invest in the stock market. You may also wonder about bond duration, coupon rate, yield-to-maturity, and many more new words. The increase in the complexity level of financial markets would put you in a tizzy if you sit on the sidelines looking to invest like most people in the country.