Lower face value to enable more retail investors bond with the best corporates
capital markets regulator's decision to reduce the face value of listed bonds is likely to give a fillip to the corporate bond market by drawing in more retail investors, in keeping with the long-standing regulatory endeavour to deepen volumes and participation.
The Securities and Exchange Board of India (Sebi) last week decided to lower the face value of listed bonds to ₹10,000, from ₹1 lakh. The regulator had in 2022 reduced the face value of such securities to ₹1 lakh from ₹10 lakh.
Given that more than 90% of corporate bonds are currently privately placed, lowering the face value could spur increased access to the financial product, market players said.
«Fractionalisation of any financial products is critical to retail participation,» said Nikhil Aggarwal, CEO of Grip Invest, an investment platform that offers bonds. Citing the «massive» equity participation by retail investors, he said, «What enabled retail participation in stocks was its small ticket price.»
Sebi's latest decision has brought parity for privately placed bonds with those sold through NCD (non-convertible debenture) IPOs, potentially unlocking a large investment base for retail players, market players said.
«Bonds have been available for a ₹10,000 ticket size before as well in NCD IPOs,» said Abhijit Roy, CEO of GoldenPi, an online platform for investing in bonds and other fixed-income securities.
«If I do a comparison of this versus privately placed bonds, the numbers for the last financial year, the volume of bonds which came into the
