Exclusive| Online bond platforms to form industry association in next 3-4 months, say sources

Online bond platforms are companies that have websites or mobile applications to sell bonds or non-convertible debentures (NCDs) to investors, especially to retail investors.

A clutch of online bond platform in India is likely to form an industry association in the next 3-4 months, four sources close to the development told Moneycontrol on June 7. Currently, there are 17-18 members looking to form this association and talks are at an early stage, one of the sources cited above said. The source added that the formation of this association has been encouraged by the Securities and Exchange Board of India (SEBI).

Online bond platforms are companies that have websites or mobile applications to sell bonds or non-convertible debentures (NCDs) to investors, especially to retail investors.

The sources added that this association will be a single point of contact for SEBI and other relevant stakeholders on issues pertaining to the industry.

“The association will also work towards investor education and awareness,” he added.

An email sent to SEBI on the formation of this association remained unanswered at the time this copy was published.

Also read: Online bond platforms coming together to form an industry association

Steady growth

In the last few years, the number of retail investors and the value of investments on online bond platforms have increased by over 100 percent, data compiled from various bond platforms showed.

Currently, there are more than 15 SEBI-recognised online bond trading platforms in India, according to market participants. These include IndiaBonds, GoldenPi, The Fixed Income, Wint Wealth, Bondskart, Bonds India, Bond Bazar, and Yubi Invest, among others.

These bond platforms offer bank bonds, PSU bonds, government guarantee bonds, state development loans (SDL), sovereign gold bonds, real estate bonds, and public issue of bonds, among others.

Two sources speaking on condition of anonymity added that representatives attending the meeting held on June 6 have decided that apart from a Rs 5 lakh joining fee, there will be an annual membership fee, which is yet to be decided.

Usually, associations in India levy a membership fee on organisations that want to join them.

Further, the structure and management of the association are yet to be decided, the sources said. A part of the membership fee will be utilised on advertisement and promotion activities, they added.

Also read: Online bond platforms see sharp jump in retail participation. Here’s what data shows

Growing retail investor base

Last month, Moneycontrol had reported that the number of retail investors on these platforms has increased. This is because a few investors have moved from debt mutual funds to bond platforms seeking higher returns on their investments, dealers said.

The number of retail investors on the Fixed Income bond platform stood at 6,532 in 2020, 32,710 in 2021, 34,184 in 2022, and 13,498 so far in 2023. This platform is backed by the Tipsons Group, which has a presence in investment banking, merchant banking, and equity broking, among others.

Also, the amounts invested by these entities on this platform were Rs 122.51 crore in 2020, Rs 671.91 crore in 2022, and Rs 294.15 crore in 2023 so far.

Similarly, data from another bond platform, Wint Wealth, showed that in FY21, 901 investors had invested Rs 13.92 crore. This increased to 19,106 investors who invested Rs 230.20 crore in FY22, and to 29,971 investors who invested Rs 542.38 crore in FY23.