SEBI Proposes Incentives to Boost Retail Investment in Public Debt Issues

India’s market regulator, the Securities and Exchange Board of India (SEBI), has proposed a set of incentives aimed at encouraging greater participation from retail investors in public issues of debt securities, according to a consultation paper released on Monday.

Proposed Incentives for Specific Investor Categories

Under the proposal, SEBI has suggested allowing issuers to offer benefits such as higher coupon rates or discounted issue prices to specific categories of investors, including senior citizens, women, members of the armed forces, and retail subscribers.

Sharp Decline in Public Debt Issuances

The move follows SEBI’s review of recent data showing a sharp decline in the volume of non-convertible debenture (NCD) issues. The total value of public NCD issuances fell to ₹8,149 crore (about $927 million) in fiscal year 2024–25, down from ₹19,168 crore in 2023–24.

SEBI noted that the downward trend underscores the need to revitalize retail participation in the debt market through public issues, which remains a critical segment for broad-based financial inclusion and capital market development.

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The regulator has invited public feedback on the proposal by November 17, signaling its intent to strengthen the appeal and accessibility of India’s debt market for individual investors.

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