India markets regulator proposes incentives to boost retail participation in debt securities

India’s markets regulator has proposed incentives for certain categories of retail investors to encourage them to invest in public issues of debt securities, a consultation paper showed on Monday.

The Securities and Exchange Board of India (SEBI) has proposed to permit issuers to offer incentives in the form of higher coupon rate or a discount to the issue price to allottees such as senior citizens, women, armed forces personnel as well as retail subscribers.

The proposal comes after SEBI’s analysis of recent data on public issuance of non-convertible debentures showed that the amount of such issues dropped to 81.49 billion rupees ($927.1 million) in fiscal 2025 from 191.68 billion rupees in fiscal year 2024, the regulator said.

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This “emphazises the need to increase retail participation in the debt market through public issues,” SEBI said.

The regulator has sought public comments on the proposal by November 17.