According to data, there will be a 30–40% growth in retail investor involvement on online bond platforms in FY2024

According to data, there will be a 30–40% growth in retail investor involvement on online bond platforms in FY2024

More than 15 online bond trading platforms in the nation, according to market participants, have received recognition from SEBI.

Retail investors' participation on online bond platforms has climbed by 30–40% so far this financial year, and their total investments have increased by 60–80% on each platform, according to Moneycontrol data.

Experts blame growing ease of investing and pressure from authorities for this rise.

According to Abhijeet Roy, CEO of GoldenPy, "regulatory initiatives and increasing digitalization have led to an increase in interest from retail and HNIs (high net worth individuals) in fixed income instruments in the loan market in recent years."

Furthermore, according to Gaurav Kumar, the founder and CEO of the corporate debt-focused UB Group of Companies, this paradigm change is consistent with the goal of turning bonds from being another alternative loan into a potent vehicle for mainstream wealth generation. There is evidence for. device.

Online bond platforms are Indian businesses that offer bonds and non-convertible debentures to investors, particularly small-scale investors, via their websites or mobile apps.

Bank bonds, bonds issued by public sector undertakings (PSUs), government-guaranteed bonds, state development loans, sovereign gold bonds, real estate bonds, and public bond offerings are among the instruments often available on these platforms.

Market players report that the Securities and Exchange Board of India (SEBI) has recognised around 15 online bond trading platforms in India as of right now. Among these are Bonds India, Espero, Vint Wealth, The Fixed Income, IndiaBonds, GoldenPie, Grip Invest, and Stable Money.

increase in the number of businesses

From 17,000 on April 1, 2023, to 25,000 on February 19, 2024, GoldenPie was the number of retail investors. As of February 19, 2023, these investors have invested Rs 3,450 crore on its platform, up from Rs 2,500 crore. March 31, 2023.

According to Espero statistics, investments have increased from Rs 300 crore in FY23 to Rs 1,500 crore so far this fiscal year. A representative of the firm informed Moneycontrol that there has been a 250 percent increase in the number of investors.

Bondscart makes similar impressive promises. The JM Financial-backed Bondskart is expanding at a rate of over 40% annually in terms of both volume and client base, a top official told Moneycontrol.

Ajinkya Kulkarni, the CEO and co-founder of Vint Wealth, said that the business is enabling bond transactions valued at over Rs 1,300 crore. The business said in November 2023 that it has made it possible for over 53,000 investors to purchase gold, corporate, sovereign, and fixed deposit bonds.

Data previously released by the firm indicated that Vint Wealth invested Rs 800 crore in FY23 and had over 30,000 investors.

"In just three years, we have facilitated AUM (assets under management) of Rs 850 crore with over 25,000 retail investors," a Grip Invest representative said.

profits to investors

The secondary market's rates on corporate bonds with a three-year maturity have increased by 8–9 basis points so far this fiscal year, while the yields on bonds with a five-year maturity have been steady and the yields on bonds with a 10-year maturity have slightly decreased.

Rate freezes by the Reserve Bank of India and yield stability, according to experts, drove investors into the bond market.

According to Kulkarni of Vint Wealth, there is still unrealized growth potential in the business, particularly in light of the anticipated regulation reform that would lower the minimum ticket size to Rs 10,000. This step towards increasing accessibility to bond investment should boost interest even further and aid in the growth of the market.

more developments

The market watchdog SEBI published a circular titled "Registration and Regulatory Framework for Online Bond Platform Providers (OBPPs)" in November 2022.

The regulator had noted that it was time to include these businesses in the regulatory system because to the notable rise in the number of individuals dealing on online bond platforms.

Later, once certain instances of mis-selling on certain platforms were discovered, the circular was revised.

Moneycontrol exclusively revealed on November 28, 2023, that the online bond platform providers' bid to join an industry association called the OBPP Association has been granted by the Ministry of Corporate Affairs.