SEBI considers incentives for women, senior citizens, armed forces in debt public issues
SEBI considers incentives for women, senior citizens, armed forces in debt public issues
It is like banks offering higher fixed deposit rates to specific categories
The Securities and Exchange Board of India (SEBI) has suggested allowing debt issuers to offer incentives to specific categories of investors in public issues, to revive interest in the debt market and increase participation.
It will broaden retail involvement and reinvigorate fundraising through public bond offerings, which have seen a sharp slowdown.
The regulator’s data revealed that funds raised via public debt issues dropped from Rs.19,168 crore in 2023-24 (FY 2024) to Rs.8,149 crore in FY 2025, a decline reflecting subdued investor interest.
Thus, under the new framework, issuers may extend incentives, including a higher coupon rate or a discount on the issue price, to certain investor classes, including retail subscribers, senior citizens, women, and armed forces. The incentives would be designed to attract individuals and boost public debt issuances.
However, it clarified that any higher coupon rate would apply only to the initial allottee and would lapse if the bonds were transferred. The decision to offer such incentives would solely be with the issuer and must be disclosed upfront in the offer document.
The proposal is like the existing practices in other investment segments. For instance, in an offer for sale (OFS) by promoters through stock exchanges, issuers are permitted to extend discounts to retail investors, provided the details are disclosed in advance.
It is similar to banks often offering higher fixed deposit rates to senior citizens, while some non-banking financial companies (NBFCs) provide marginally better returns to women depositors.
