Retail investor participation in online bond platform grow 30-40% in FY24, shows data

bonds

Retail investor activity on online bond platforms rose 30-40 percent and the collective amount invested by them has surged 60-80 percent on each platform so far in this financial year, according to a Moneycontrol analysis.

Experts attribute this rise in a push by authorities and growing ease of investment.

“In recent years, the debt market has witnessed a surge in retail and HNI (high net-worth individual) interest in fixed-income instruments, driven by regulatory initiatives and increasing digitisation,” said Abhijit Roy, CEO, GoldenPi.

Adding to this, Gaurav Kumar, founder and CEO of Yubi Group of Companies, which specialises in corporate debt, said this paradigm shift is a testament to a vision to make bonds a powerful tool for mainstream wealth creation rather than it being just another alternative debt instrument.

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

The instruments offered on these platforms generally include bank bonds, those issued by public sector undertakings (PSUs), government guarantee bonds, state development loans, sovereign gold bonds, real estate bonds and public issue of bonds, among others.

Currently, there are more than 15 online bond trading platforms in India that are recognised by the Securities and Exchange Board of India (SEBI), according to market participants. These include IndiaBonds, GoldenPi, The Fixed Income, Wint Wealth, Bondskart, Aspero, Stable Money, Grip Invest and Bonds India, among others.

Also read: Green bond issuances fall to two-year low so far in FY24 on fewer incentives, waning investor interest

Companies growth numbers

GoldenPi saw its retail investor numbers grow to 25,000 as on February 19, 2024, compared with 17,000 on April 1, 2023. The amount invested by these investors through its platform rose to Rs 3,450 crore as on February 19, 2023, versus Rs 2,500 crore on March 31, 2023.

Aspero data showed that the amount invested stood at Rs 1,500 crore so far this fiscal year, from Rs 300 crore in FY23. The growth in terms of the number of investors is 250 percent, a company official told Moneycontrol.

Bondskart too has boasted healthy numbers. “It’s growing over 40 percent on average, in terms of volume and number of clients,” a senior official of Bondskart, backed by JM Financial, told Moneycontrol.

Ajinkya Kulkarni, co-founder and CEO, Wint Wealth, said the company is facilitating bond trades worth over Rs 1,300 crore. In November 2023, the company had said it enabled over 53,000 investors to invest in fixed deposits, and corporate, sovereign and gold bonds.

Wint Wealth had around 30,000 investors and Rs 800 crore invested in FY23, according to data the company shared earlier.

“Over 25,000 retail investors strong, we've facilitated a staggering Rs 850 crore AUM (assets under management) in just three years,” said an official from Grip Invest.

The Fixed Income, an online bond platform saw a increase in number of registration to 1,20,457 as on February 19, from 84,939 as on April 1, 2023. the volumes has increased to Rs 2,459.45 crore as on February 19, from Rs 1,644.16 crore on April 1, 2023.

Returns for investors

So far in this financial year, yields on corporate bonds in the secondary market rose by 8-9 basis points in three-year papers, while those on five-year papers remained stable, and 10-year bonds fell marginally.

Experts said the stability in yields and the rate pause by the Reserve Bank of India pushed investors to the bond market.

Kulkarni from Wint Wealth said the market's growth potential was still untapped, especially with the anticipated regulatory change to lower the minimum ticket size to Rs 10,000. This move towards making bond investments more accessible promises to revive further bolster interest and contribute to the market's expansion.

Also read: Electoral bonds verdict, RBI action on Paytm bank sign of robust institutions

Other developments

In November 2022, markets regulator SEBI released its circular ‘Registration and Regulatory Framework for Online Bond Platform Providers (OBPP)’.

The regulator had observed that given the significant increase in the number of people transacting on online bond platforms, it was time such firms were brought under a regulatory framework.

The circular was later amended after certain instances of mis-selling were reported on some platforms.

On November 28, 2023, Moneycontrol exclusively reported that the Ministry of Corporate Affairs has approved the application submitted by online bond platform providers for the formation of an industry body under the name OBPP Association.