Latest news with #OnlineBondPlatformProviders
Economic Times
08-08-2025
- Business
- Economic Times
Click-to-Invest: How technology is making bonds as simple as buying stocks
India's bond market is undergoing a significant transformation, becoming more accessible to retail investors. SEBI's reforms, including reduced minimum investments and the introduction of Online Bond Platform Providers, have democratized bond investing. Retail investors are now allocating over $3 billion annually to listed bonds, with innovations like bond baskets and auto-reinvestment features enhancing the user experience. Tired of too many ads? Remove Ads Then vs now: A quiet revolution Tired of too many ads? Remove Ads The forces behind the transformation SEBI's game-changing reforms Minimum investment reduced: A 99% drop in the entry barrier—from Rs 10 lakh to Rs 10,000 for privately placed bonds. A 99% drop in the entry barrier—from Rs 10 lakh to Rs 10,000 for privately placed bonds. Creation of OBPP licenses: The launch of the Online Bond Platform Provider (OBPP) framework empowered fintech platforms to legally distribute bonds online to retail investors. The launch of the Online Bond Platform Provider (OBPP) framework empowered fintech platforms to legally distribute bonds online to retail investors. Exchange-based execution: All orders must now be placed and settled via recognized stock exchanges—bringing transparency, standardization, and investor protection. Not just simpler—also safer Tired of too many ads? Remove Ads Key protections include: Counterparty risk mitigation: All trades settle via stock exchanges on a T+1 basis, eliminating bilateral risks. Product quality controls: Only bonds meeting enhanced disclosure and governance standards can be offered in smaller ticket sizes. Mandatory ratings: Credit ratings are compulsory for retail bond offerings, improving transparency. Platform accountability: OBPP platforms are subject to SEBI and exchange audits, strict advertisement codes, and ongoing compliance checks. A new era of innovation Bond baskets: Several platforms now offer pre-curated bond portfolios, allowing users to diversify risk easily. Several platforms now offer pre-curated bond portfolios, allowing users to diversify risk easily. Auto-reinvestment features: Infinite is a pioneering product that enables interest earned on bonds to be automatically reinvested into mutual funds—enhancing compounding potential. Conclusion (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of .) 'How can I invest in a bond?'Until recently, this wasn't a common question among Indian retail investors . The reason was simple: the process was so complex and inconvenient that most investors excluded bonds from their portfolios few of us were old enough to witness India's stock market go digital in the early 2000s, we now have a front-row seat to a similar transformation unfolding in the bond market . A once-clunky process is being reimagined for the digital result? Investing in bonds now mirrors the experience of buying stocks. And this is just the beginning. In the coming months, investors can expect SIPs for bonds, loan facilities against bond holdings, and even active trading as investor sophistication any student of economics will attest, structural change is often the result of supply-demand decades, Indian households trusted fixed deposits (FDs) as their primary vehicle for fixed returns. But as India's macroeconomic fundamentals improved, interest rates declined steadily. The post-COVID rate cuts by the RBI—dropping policy rates to record lows—pushed investors to look elsewhere for yield. This led to a surge of interest in higher-return instruments like invoice discounting, peer-to-peer lending, and asset-backed 2022, it became clear that regulators needed to step in—not only to meet this growing demand, but to channel it into safer, more transparent products. SEBI responded 2022 and 2024, SEBI rolled out a series of landmark regulations that have made India's bond markets among the most retail-friendly in the world:These three pillars—access, digital reach, and regulatory oversight—have democratized bond investing in India. And the results speak for themselves: retail investors are now allocating over $3 billion annually to listed bonds, growing at 300% regulatory approach has been lauded for its pragmatism and foresight, balancing innovation with investor protection. The shift to simplicity has not come at the cost of over 30 SEBI-licensed OBPPs are not just making bonds accessible—they are elevating the user experience through smart innovation:India's bond market is undergoing a quiet revolution. What was once an exclusive, offline, and illiquid asset class is rapidly becoming as seamless and retail-friendly as equities. Enabled by regulatory foresight and accelerated by technology, bonds are no longer the neglected cousin in a portfolio—they are fast becoming the digital-age investor's trusted companion.(The author of the article is Nikhil Aggarwal, Founder & Group CEO, Grip Invest): Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Mint
29-04-2025
- Business
- Mint
Corporates tap bond markets for record fundraise in FY2025
MUMBAI : Indian companies' fund raising through corporate bonds hit a high in fiscal year 2025, owing to the fall in yields and strong appetite. According to data released by the Securities and Exchange Board of India (Sebi), Indian firms raised ₹ 9.87 trillion through bond sales until March 2025, a 17% jump from the previous year. 'Corporate bond issuances touched a new high last year, driven by a combination of factors. Although the overall year-on-year growth in issuance volumes remained steady, major structural shifts were visible. Banks' infra bond issuances surged to a record level, while the absence of HDFC Ltd's regular bond issuances post its merger with HDFC Bank was notable," said Venkatakrishnan Srinivasan, founder and managing partner at debt advisory firm Rockfort Fincap. While corporate bond issuances remained flat year on year, public sector entities and banks' issuances increased nearly 25%, contributing to the overall increase. According to exchange data, banks collectively raised ₹ 94,438 cr through infrastructure bonds in FY25, compared to ₹ 51,1081 in FY24. Banks collectively raised ₹ 89,588 crore through infrastructure bonds in the first 11 months of FY25 against ₹ 51,081 crore in the year-ago period. Public sector banks (PSBs) accounted for 90% of the total infra bond issuances, up from 51% in the year-ago period. Tight banking system liquidity also pushed corporates and NBFCs to tap bond markets increasingly, where funding was available at comparatively better rates than bank loans. Last year saw the banking system's liquidity turn from surplus in the first half to deficit in the second half. The average liquidity deficit in the inter-bank market crossed ₹ 3.3 trillion in January this year. Yields on corporate bonds fell between 25 and 50 basis points last year, tracking government bond yields. 'For a larger part of FY2025, the corporate bond curve was inverted on account of tight liquidity conditions and strong demand in long-term corporate bonds from investors," said Ketan Parikh, head of fixed income at ICICI Prudential Life Insurance. While AAA-rated companies dominated the issuance, AA-rated issuances jumped by 7% last year, according to stock exchange data. 'With the introduction of Online Bond Platform Providers (OBPP) platform and rise in interest amongst family offices, we saw a significant rise in issuance of AA-rated bonds and below. While this can be viewed as a good sign of broadening the credit spectrum, there is a need for the retail bond investor to know the risk which they carry with the various issuers and not get lured by only the returns," said Vinay Pai, head of fixed income at investment banking firm Equirus. Fund managers expect this trend to continue in FY2026, with corporate bond issuances crossing ₹ 11 trillion. With the RBI having infused almost ₹ 6 trillion of liquidity through various measures, including open market operations and FX swaps, and another ₹ 2.5 to 3 trillion worth of dividends being paid by the RBI to the government, market participants are expecting liquidity to remain in surplus this year. RBI Governor Sanjeev Malhotra has also assured that the central bank will keep 1% of net demand and time liabilities (NDTL) as surplus liquidity. 'Last year, we had a significant amount of demand for long-tenor government securities from insurance companies, provident and pension funds. Now, as the interest rate cutting cycle plays out and we get deeper into the rate cut cycle, maybe in Q2 or Q3 of FY2026, we could see a shift from long-tenor government securities towards corporate bonds in the 5 to 10-year segment from a carry perspective and positioning for curve steepeners. This could lead to a compression in the currently elevated corporate bond spreads," added ICICI Pru Life's Parikh. Market participants also say that companies will prefer to tap the bond market this year as well, since the bank lending rate has yet to come down to the extent that the RBI has cut rates. While the repo-linked lending rate has come down by 50 basis points (bps), the Marginal Cost of Funds-based Lending Rate for most banks is down by only 10 bps. Corporate bond yields have fallen by 50-60 basis points to below 7%, especially in the 3-5 year segment.
