How corporate bonds can reach retail investors
Ideally, retail investors should allocate 5-10% of their portfolio to bonds to realize any meaningful gains.
Over the last year, the Securities and Exchange Board of India (Sebi) has been working relentlessly to enhance the participation of retail investors in the corporate bonds market. It started in October 2022 with a circular titled ‘Reduction in denomination for debt securities and non-convertible redeemable preference shares’, whereby it reduced the minimum face value of listed debt securities under private placement from ₹10 lakh to ₹1 lakh. For the uninitiated, the ticket size of publicly issued bonds is ₹1,000. In November 2022, Sebi’s subsequent circular titled ‘Registration and Regulatory Framework for Online Bond Platform Providers (OBPPs)’ prohibited these providers from facilitating unlisted debt securities transactions to protect retail investors from liquidity risk in such investments.