Regulators give a big push to deepen corp bond mkt

IN THE PAST couple of years, the corporate bond market has received a big push from regulators.

- CHRISTINA TITUS

The Securities and Exchange Board of India (Sebi) has been opening up the market for foreign players and retail investors. It has been in consultation with the Reserve Bank of India (RBI) for products like bond derivatives, Sebi Chairman Tuhin Kanta Pandey said last week.

With the aim of making bonds as accessible as equities, Sebi is also trying to deepen the market by making it more retail investor friendly.Recently, it has proposed to allow debt issuers to offer incentives, such as higher coupon rates or discounts on issue price, to certain categories of investors in public issuances of nonconvertible debentures. Senior citizens, women, armed forces personnel and retail subscribers will receive these sops, as pera Sebi’s consultation paper.

“This would encourage retail participation in debt securities while providing a fillip to the number of public issuances in the debt market,’ Sebi said. Earlier, it cut the minimum investment size to ₹10,000 from ₹1 lakh. The emergence of online bond platforms has further improved retail participation.

“The new move focuses on offering differential pricing based on investor segments. More than the development of the bond market, it helps issuers cater to such investor groups through differentiated pricing,” said A Balasubramanian, MD & CEO, Aditya Birla Sun Life.