Democratising Debt Investing

Online bond platform providers, which operate under Sebi regulations, have democratised retail access to bonds, but retail investors should understand the risks involved before buying

- By JOYDEEP SEN, Corporate Trainer and Author By DR VAISHALI OJHA, Assistant Professor, NLDIMSR, Mumbai

For decades, India's debt markets have been the preserve of institutional investors, with retail participation limited and often discouraged due to their perceived complexity. Equity markets captured the imagination of small investors, while bonds—despite their importance in financing businesses and governments and being foundational to savings, credit creation and stable returns—remained invisible to a large extent to retail investors.

Since the launch of online bond platform providers (OBPPs), retail participation in corporate bonds has surged. The Securities and Exchange Board of India (Sebi) has responded to it by tightening regulations and cautioning against unregistered platforms. The emergence of Sebi-regulated OBPPS promises to democratise access to bonds, offering retail investors a digital gateway into a market once considered opaque.

However, retail investors must recognise that the apparent simplicity of OBPPs does not eliminate underlying risks in bonds.