MC Explains: All you need to know about electronic bidding platforms

MC Explains

Issuers in the corporate bond markets often use electronic bidding platforms, or EBP, for the bidding process of their bonds. Bidding on these platforms is very convenient and easy for the issuers as well as investors.

Issuers can even issue a Rs 50 crore bond through this platform, including the greenshoe option. All investors, including institutional as well as high net worth (HNI) arrangers, are allowed to bid through this platform. Here is an explainer on how these platforms work.

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What is an EBP platform?

The EBP platform is for bidding for debt securities issued on a private placement basis. It is a user-friendly platform that aims to help the market participants in better price discovery and transparency in the overall fundraising process.

How many such platforms are there?

There are two platforms, one on the BSE and the other on the National Stock Exchange of India (NSE).

When were these platforms launched?

Both these platforms were launched following an order from the Securities and Exchange Board of India (SEBI).

BSEBOND, the Electronic Book Platform (EBP) and NSE's Electronic Debt Bidding platform (NSE-EBP) were launched on July 1, 2016. This was to bring efficiency and transparency in the price discovery mechanism and to reduce the time and cost of these issuances.

The BSEBOND platform was upgraded on January 5, 2018 and on August 16, 2018.

Usage of platform

The usage of this platform is mandatory for issuers with an issue size of Rs 50 crore and above, inclusive of the greenshoe option (if any).

However, issuers have the option to use the electronic book mechanism for private placement of debt securities in the primary market even if the issue size is less than Rs 50 crore.

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Who can participate on these platforms?
Participants like Issuers, Arrangers, Custodians, and Investors – (Qualified Institutional Buyers “QIBs” and Non-QIBs) can participate on the platform.

All participants can get registered on the platform via a simple online process. Post registration, the access credentials are shared with the authorised personnel of the participants.