Analysts have hailed the Securities and Exchange Board of India's recent move to reduce the ticket size or face value of debt securities as a game changer for the entire financial market and retail savings.
SEBI has drastically reduced the ticket size from Rs 1 lakh to Rs 10,000. This is likely to boost the participation of retail investors in the corporate bond market.
"Making Rs 10,000 as your option in the placement segment is a wealth of movement that is something that the industry has been demanding for a very long time," said Ajay Manglunia, managing director and head of the investment grade group at JM Financial.
"This will not only create liquidity but will also kind of increase the competitive levels of various options available through the online platform," he said.
"The RBI’s initiative to allow retail investment in government securities, yielding around 7%, and corporate bonds, offering 9–12%, is a game changer, providing better returns and greater incentives for retail investors to participate in financial markets," Manglunia said.
"It's a game changer for the entire financial market and the way retail is saving money," said Suresh Darak, founder and director of Bondbazaar.
"Retail investors previously had limited options such as fixed deposits, equity markets, or mutual funds. Now, with a minimum investment of Rs 10,000, they can invest directly in the bond market, earning 3-5% higher yields than fixed deposits," Darak said. "This change also benefits issuers by opening a new avenue for raising funds and increasing retail participation in the market."
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