MC Exclusive| Incred Money may commence online bond platform operations this week

Incred Money may commence online bond platform operations this week, say sources

Incred Money, an arm of Incred group, is likely to commence online bond platform operations later this week, for which it acquired a debt broking licence from the Securities and Exchange Board of India (SEBI) this month, people aware of the development told Moneycontrol on June 22.

“InCred Money's offering will go live for users to transact later this week,” one of the sources cited above said.

Earlier this month, the company got a debt broking licence, which has been mandated by the SEBI for any entity to run an online bond platform, the source added. The company applied for the licence at the end of January.

InCred was deferring the launch as it was awaiting other regulatory approvals from SEBI and exchanges, the source added.

In 2022, the stock market regulator introduced regulations for online bond platforms, stating that no company or individual shall act as an online bond platform provider without a certificate of registration as a stockbroker under the SEBI Regulations, 2021.

With the launch of its bond platform, Incred Money will join existing platforms offering the service, including The Fixed Income, Bondskart, Grip Invest and Wint Wealth and BondsIndia.

In December 2022, the Incred Group acquired Orowealth, which was then relaunched as InCred Money. It was relaunched to focus on offering alternative as well as traditional investments, such as  mutual funds (MF), to customers. Further, it also laid down plans to launch an online bond platform.

Vijay Kuppa, co-founder of Orowealth, was appointed CEO of InCred Money.

Currently, there are more than 20 online bond platforms in the market. Generally, these platforms offer bank bonds, PSU bonds, government guarantee bonds, state development loans (SDL), sovereign gold bonds, real estate bonds, and public issues of bonds, among others, on their platforms.

In the last few years, online bond platforms have recorded sharp growth of over 100 percent in terms of the number of retail investors and value of investments.

Also read: Sebi reins in bond platforms selling unlisted securities, expands product categories

Website launch

The bond platform already has a list of people waiting to sign up. “We haven’t yet enabled actual transactions,” the person cited above said.

Source added that in the first week of the website’s launch, more than 3,000 people had signed up as subscribers, and most are expected to turn into investors.

After the launch, Incred Money will offer its first bond on the platform. The source declined to name the bond the company will offer, citing arrangements with the issuer. According to the website, investors will get 10-12 percent fixed returns on their alternative investments.

Sources further said that due to Orowealth’s presence in the fixed-income space, Incred Money will have a strong fintech pedigree and capabilities. Orowealth has experience managing retail wealth since 2016.

Sources said that the company already has more than Rs 1,000 crore in assets under management (AUM) across products and the next target would be to get to Rs 5,000 crore before starting to journey to get higher numbers.

However, experts anticipate technological challenges for the platform as the trading will be completely online and on the website.

Also read: Online bond platforms selling unlisted bonds a grey area: Experts

Industry association to be formed

Sources told Moneycontrol that Incred Money is likely to be part of an association of online bond platforms expected to be formed in the coming months.

On June 7, Moneycontrol exclusively reported that a clutch of online bond platforms in India is likely to form an industry association in the next 3-4 months.

Currently, there are around 20 online bond platforms that are expected to be part of this association, sources said.

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

Aspiring members have held more than five meetings in the last few weeks to discuss issues such as uniformity, joining fees, rules and regulations. The meetings also involved SEBI officials, people aware of the development said.