Daijiworld Media Network – Mumbai

Mumbai, Feb 5: Securities and Exchange Board of India (Sebi) chairman Tuhin Kanta Pandey on Wednesday expressed concern that awareness of corporate bonds among Indian households remains significantly lower than that of cryptocurrency.

Speaking at the inaugural session of a programme on the corporate bond market, Pandey said Sebi’s latest investor survey revealed that awareness of corporate bonds stands at just 10 per cent, while cryptocurrency awareness is higher at 15 per cent.

“Sebi’s investor survey shows awareness of corporate bonds as an investment product is only about 10 per cent, well below deposits, insurance and small savings. Even cryptocurrency has higher awareness,” Pandey said.

According to the survey, released on January 20, awareness among Indian households was highest for fixed and recurring deposits at 98 per cent. Mutual funds stood at 53 per cent, followed by stocks and shares at 49 per cent. Awareness of futures and options was at 13 per cent, while both corporate bonds and REITs and InvITs were at 10 per cent.

Emphasising the need to deepen India’s corporate bond market, the Sebi chief highlighted its benefits for both corporates and retail investors. “A well-developed corporate bond market provides companies with an alternative to bank borrowing, particularly for long-term funding. It also diversifies risk beyond the banking system and can help reduce the cost of capital,” he said.

For retail investors, Pandey noted that corporate bonds can offer diversification beyond equities and bank deposits. “Access through regulated products and platforms, with proper disclosures and strong investor protection, can enable households to participate more meaningfully in fixed-income securities,” he added.

However, Pandey outlined several challenges hindering the development of a robust bond market in India. He pointed out that the market is heavily skewed towards highly rated issuers, while fund-raising is dominated by financial institutions rather than a broad range of industries, limiting fair price discovery.

He also flagged the shallow secondary market for corporate bonds, as institutional investors largely follow a ‘buy-and-hold’ strategy instead of active trading. “Retail participation in corporate bonds remains extremely low, especially when compared to equity markets,” he said.

Stressing that regulation alone cannot build a strong bond market, Pandey urged market participants to share insights on structural challenges, investor preferences and impediments to growth.

Later, speaking to reporters, the Sebi chairman said that the proposed US-India trade deal could support increased investment inflows and capital formation in the country.

“Whenever regulatory overhangs and trade frictions are removed, capital formation tends to accelerate,” Pandey.