Business
India’s Corporate Bond Market Crosses ₹59 Lakh Crore
Tuhin Kanta Pandey said corporate bonds are not risk-free as the Securities and Exchange Board of India explores major reforms, including blockchain-based tokenisation of bonds, to deepen India’s debt market and improve investor participation.
Tuhin Kanta Pandey on Tuesday said corporate bonds are not risk-free instruments even as the Securities and Exchange Board of India (SEBI) prepares a series of reforms aimed at strengthening India’s debt market ecosystem.
Speaking at the CareEdge Debt Market Summit in Mumbai, Pandey said SEBI is considering a pilot project for tokenisation of corporate bonds using blockchain-based technology to improve settlement efficiency, transparency and accessibility in the bond market.
He noted that India’s corporate bond market has witnessed substantial growth over the last decade, with outstanding corporate bonds rising from more than ₹17 lakh crore in FY2015 to over ₹59 lakh crore in FY2026. Debt issuances during the current fiscal have already mobilised more than ₹9 lakh crore, nearly double the amount raised through equity markets.
Despite the expansion, Pandey highlighted several challenges including low retail participation, limited liquidity and concentration of issuers within a few sectors and ratings categories. He emphasised that corporate bonds carry credit, liquidity and interest-rate risks, underscoring the importance of investor awareness and transparency.
The SEBI chairman also said the regulator is collaborating with the Reserve Bank of India and market participants to improve market-making mechanisms and enhance secondary market liquidity.
Among the proposed reforms, SEBI is considering a separate regulatory framework for debt brokers and reviewing compliance norms for entities listed only in the debt market.
Pandey added that SEBI plans outreach programmes to encourage more companies, particularly SMEs, to raise funds through bond markets. The regulator is also reviewing the municipal bond framework to attract greater retail participation and support financing for urban infrastructure projects.
The proposed measures are aimed at making India’s debt market broader, more liquid and technologically advanced while expanding participation beyond institutional investors.