The Securities Exchange Board of India (Sebi) has decided to reduce the minimum face value of privately placed nonconvertible debentures (NCDs) from 1 lakh to 10,000. The face value had earlier been lowered from 10 lakh to 1 lakh in October 2022. The bulk of all NCD offers take place through the private placement route. This is a landmark step that is expected to boost retail participation in the bond market.
With this measure, the regulator has lowered the entry barrier into the bond market. "Youngsters and those with lower amounts to invest will also be able to participate in it," says Vijay Kuppa, chief executive officer (CEO), InCred Money. A lower ticket size, according to him, will also allow such investors to build a more diversified portfolio.
Sebi has also proposed to standardise the record date to 15 days before the due date for payment of interest or principal. This means investors must hold the bonds at least 15 days before this date to be eligible for payment. "Until now, every issuer followed its own methodology. Standardisation will make the market more efficient and less complex," says Vishal Goenka, co-founder, IndiaBonds.com According to Kuppa, Sebi's stipulation that the issuer must appoint a merchant banker will ensure that retail investors' safety is not compromised.
Portfolio stability, regular cash flows
Bonds, which pay out coupons on fixed dates, are a good option for investors who want regular cash flows. They also offer the chance to earn stable but inflation-beating returns.
この記事は Business Standard の May 13, 2024 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、8,500 以上の雑誌や新聞にアクセスしてください。
すでに購読者です ? サインイン
この記事は Business Standard の May 13, 2024 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、8,500 以上の雑誌や新聞にアクセスしてください。
すでに購読者です? サインイン
Trai dials National Numbering Plan tweak
The Telecom Regulatory Authority of India (Trai) on Thursday issued a consultation paper on revising the National Numbering Plan to create a sustainable pool of new phone numbers for the country's nearly 1.2 billion mobile phone connections.
South, East India accounted for 67% of heatwave days in 2023
The number of heatwave days in east and southern peninsular India during peak summer in 2023 almost doubled and accounted for nearly two-thirds of the total heatwave days experienced across the country, the latest data released by the National Statistical Office (NSO) showed.
Monsoon reaches Maharashtra: IMD
Southwest monsoon reached Maharashtra on Thursday, bringing respite to the state where many parts have been reeling under scorching heat and severe water shortage.
EV portfolio to drive Uno Minda growth
The stock of auto component maker Uno Minda jumped 13 per cent on Thursday after it announced a technical licensing agreement with ChinaInovance based Suzhou Automotive Company.
New govt to boost infra sector, but expect some hurdles
The general elections inevitably led to a slowdown in government projects through Q4FY24 and Q1FY25 with muted activity.
Markets extend gains as govt formation nears
Sensex jumps 692 pts, Vix slumps for 2nd day
MF platforms face backlash over delay in unit allotments
Several investors wanting to invest in mutual fund (MF) schemes, amid the selloff in the market on Tuesday, were left in the lurch as online MF investment platforms failed to execute the transactions on time.
Over $2 bn exodus: PEs, promoters swiftly reacted before poll verdict
Share sales hold breath for government clarity
Sebi's warning to ICICI Bank over ICICI Securities delisting
The Securities and Exchange Board of India (Sebi) on Thursday issued a warning to ICICI Bank for flouting norms during its outreach programme to the shareholder of broking firm ICICI Securities to vote in favour of the delisting.
The ageism debate
India will gain from raising the retirement age