India's Market Regulator Considers Incentives to Increase Depth in Mid-Tier Corporates' Bond Market

India’s Securities and Exchange Board (SEBI) is exploring incentives and alternative funding avenues to enhance bond market depth, particularly for mid-tier corporates. SEBI’s new chairman, Tuhin Kanta Pandey, emphasized the need for greater transparency, regulatory balance, and investor confidence in the corporate debt market.

 

Key Highlights:

✅ Regulator Reforms: SEBI is looking to simplify disclosure guidelines and reduce operational hassles for foreign portfolio investors (FPIs) and alternative investment funds (AIFs).

✅ Bond Market Enlargement: The regulator plans to introduce new funding instruments to raise corporate bond participation levels, making them more liquid and accessible.

✅ Conflict of Interest Review: SEBI has established a high-level committee to review governance matters, with a focus on board meeting transparency and regulator decisions.

✅ Adjustments in Foreign Investment: SEBI has increased the threshold of ownership disclosure of FPIs from ₹25,000 crore to ₹50,000 crore to enhance the confidence of foreign investors.

✅ Growth of Corporate Bonds: India's corporate bond market will more than double to ₹65-70 lakh crore by March 2025 due to policy reforms and flows of foreign capital.

 

With SEBI’s proactive measures, India’s bond market is poised for significant expansion, fostering greater financial inclusion and investment opportunities.

 

Source: Mint, Mint, Economic Times