The rise of retail bond investing: Stories behind India's quiet fixed-income revolution
Spotlight Wire For years, India's retail investors have largely leaned on equities, mutual funds, and fixed deposits, leaving the vast spotlight wire -plus (Source: SEBI) bond market relatively untouched. Despite being one of the largest bond markets in Asia, participation from individual investors remained in the low single digits. The reasons were many: lack of awareness, opaque structures, and a long-standing perception that bonds were reserved for institutions or the ultra-wealthy.
But the tide is turning. In recent years, thanks to regulatory changes by SEBI and the emergence of new-age digital platforms, retail interest in bonds has seen steady growth. The Online Bond Platform Provider (OBPP) framework, streamlined KYC processes, and greater disclosure standards have helped transform bonds from an obscure financial instrument into a versatile, accessible asset class.
To understand this shift, we spoke to five investors across age groups, professions, and experience levels. Their stories reveal how bonds are helping them meet goals as varied as wealth preservation, passive income, portfolio diversification, and financial legacy-building. Most importantly, they show that fixed income is no longer a one-size-fits-all instrument, but a purposeful addition to modern Indian portfolios.
What drew them to bonds
Lakshminarayan Gopalkrishnan, a Chennai-based VP at an engineering consultancy, considered bonds after over three decades of experience in managing his money through wealth advisors. His reason was straightforward: 'At this stage of life, I want safety, predictability, and monthly returns. Bonds felt like the right next step.'
Anto Paily, a portfolio manager from Kerala, took a different route. Having actively traded equities earlier, he discovered bonds nearly a decade ago when he realised he needed stable cash flows.
Utsav Khandelwal, President at 3ev Industries, and Stanford and Wharton MBA, began exploring bonds through US. T-bills during his decade-long stint in the US. After returning to India two years ago, he turned to Indian bonds to balance liquidity and yield amid fading crypto and equity hype, and to reduce overall portfolio volatility.
Niraj Biyani, an investment banker in Mumbai, was introduced to bonds a few years ago through financial advisors and cold calls. With over two decades of experience in capital markets, he now actively invests in bonds for what he calls 'capital protection and better-than-FD returns.'
Dr Mukesh Mittal, a government professional in Rajasthan, entered the world of bonds more recently after being encouraged by his son. 'I just wanted to start saving,' he says of his early years. But falling FD rates and the search for better options led him to corporate bonds. Today, they make up nearly 70% of his portfolio. 'It's for the future of my children,' he explains, underlining his long-term intent of wealth transfer and family security.
How bonds fit into their financial strategiesEach investor uses bonds differently, shaped by their financial goals, age, and life stage.Lakshminarayan focuses on short-term passive income through 1 to 1.5-year instruments that offer fixed monthly payouts. His strategy is designed for predictability and risk reduction.Anto uses bonds as a steady income source. He reinvests the proceeds and has created a laddered portfolio (a structure where bonds mature at regular intervals), allowing him to manage cash flow and reinvest at prevailing interest rates.Utsav sees bonds as a smart cash-parking option, preferring higher-yielding NBFC instruments to avoid market volatility or illiquidity tied to real estate. His strategy is to ensure stability, income, and diversification within portfolios, which helps manage risk while supporting long-term financial goals.For Niraj, bonds serve dual purposes; protecting principal while generating reliable income. 'Having navigated multiple market cycles from the dot-com crash bear market of 2000-2001, the global financial crisis of 2008-2009, to the COVID-19 slump of 2020, safeguarding capital is important for me.' He also favours shorter tenures of less than two years for quicker liquidity and reduced interest rate risk. 'For me, it's not solely about chasing the highest yield, I use bonds to anchor volatility, creating a stable layer in the portfolio that complements more dynamic equity holdings.'Dr Mittal's allocation strategy is guided by credit quality and tenure. He steers clear of AAA-rated bonds for their lower yields and instead selects A or AA-rated instruments that provide better returns with acceptable risk. 'The results and stability of the issuing company matter to me.' His portfolio has benefited from multiple bond maturities over the past year, and he remains committed to the strategy for long-term capital preservation and family planning.
How they select bonds and platforms
Across all five investors, three themes emerge: creditworthiness, tenure, and returns. But their approaches vary based on risk appetite and financial goals. Lakshminarayan looks closely at credit ratings (AA+, A+), seniority of the instrument, and company fundamentals like revenue and profitability. He's conservative but open to exploring new issuers if the fundamentals are sound.Anto is comfortable with slightly lower-rated paper, going as far as BBB if the operational metrics and growth outlook of the issuer are strong. His target is clear: 12% to 13% returns.Utsav keeps things data-driven. He screens for pre-tax yields above 10%, prefers maturities under three years, and scrutinises NPAs, healthy AUM, collection efficiency and overall risk signals. Government bonds don't excite him, he leans toward high-performing NBFCs.Niraj's approach has evolved from aggressive to more balanced as his responsibilities and financial needs matured. He now evaluates bonds based on credit ratings (BBB+ to AA+), issuer strength, payment frequency (monthly or quarterly), and post-tax returns that beat traditional fixed deposits.Dr. Mittal has explored a wide array of digital bond platforms. His platform preference is driven by transparency, ease of execution, and overall user experience. 'I look at the company's fundamentals, the interest rate, and the credit rating before making a decision,' he says.
The bigger picture For all five, bonds are more than a tactical asset. They're a growing part of a diversified strategy. Each investor shows that bonds aren't just about safety, but also about purposeful investing for real life outcomes - income, flexibility, and wealth continuity.Retail investors are actively shaping this new wave of fixed income adoption with conviction and clarity. With more digital platforms and simplified processes entering the fray, the Indian bond market is no longer reserved for institutions. It's becoming a core, accessible asset class for those who want to build resilient portfolios without waiting for the next market high.
Disclaimer: Investments in debt securities, municipal debt securities/ securitised debt instruments are subject to risks including delay and/ or default in payment. Read all the offer related documents carefully. Any views or opinions expressed by individuals featured in the content are their own personal views and do not represent those of the company or its owners. The company is not responsible or liable for the content or views expressed herein.
Disclaimer - The above content is non-editorial, and TIL hereby disclaims any and all warranties, expressed or implied, relating to it, and does not guarantee, vouch for or necessarily endorse any of the content.
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