The Securities and Exchange Board of India (SEBI) is taking significant steps to improve the corporate debt market by introducing bond ETFs and derivatives.
This initiative aims to enhance liquidity and facilitate wider participation from investors, particularly retail participants.
SEBI announced plans to develop bond exchange-traded funds (ETFs) and derivatives linked to corporate bond indices.
SEBI Chairperson Tuhin Kanta Pandey highlighted the potential of these instruments to allow retail investors access to debt markets with smaller investments, while also assisting institutions in hedging interest-rate risks.
These efforts are part of SEBI's broader strategy to deepen and diversify India's corporate debt market.
SEBI is currently reviewing the listing obligations for entities listed solely in the debt segment. Currently, such entities are subject to similar compliance requirements as equity-listed firms under the LODR (Listing Obligations and Disclosure Requirements) obligations.
The review aims to ease some of the compliance burdens on pure debt-listed entities.
The corporate bond market has seen noticeable growth over recent years. Outstanding corporate bonds have increased from ₹17.5 lakh crore at the end of FY15 to over ₹59 lakh crore, achieving a compound annual growth rate of approximately 12%.
The annual fundraising through debt markets averaged ₹8 lakh crore from FY21 to FY25, while in FY26, ₹9.1 lakh crore was raised, significantly higher than the amount mobilised through equity markets during the same period.
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SEBI is considering a pilot project for the tokenisation of corporate bonds. By employing digital ledger technology, this project aims to achieve faster settlement, better traceability, automated servicing, and enhanced transparency.
This exploration is part of SEBI's commitment to embracing innovative practices while remaining cautious of the associated risks.
SEBI's introduction of ETFs, derivatives, and exploration of tokenisation marks substantial progress in boosting the corporate debt market's liquidity and accessibility. By streamlining listing obligations and exploring innovative solutions, SEBI aims to provide a more robust and inclusive environment for investors and issuers alike.
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Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: May 27, 2026, 10:34 AM IST
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