Senior citizens, women in focus: Sebi plans special perks for select investors; aims to boost retail bond participation

In a move aimed at reviving interest in India’s public debt market, the Securities and Exchange Board of India (Sebi) on Monday proposed allowing debt issuers to offer special incentives to select investor categories, including senior citizens, women, armed forces personnel, and retail subscribers.

The proposal seeks to encourage greater retail participation in bond issuances, which have seen a sharp decline in recent years. According to Sebi’s annual report, the amount raised through public debt issues fell from Rs 19,168 crore in FY 2023–24 to Rs 8,149 crore in FY 2024–25, reported PTI.

Currently, Regulation 31 of the Sebi (Issue and Listing of Non-Convertible Securities) Regulations, 2021 prohibits anyone connected with an issue from offering incentives in cash, kind, or services, except for legitimate fees or commissions.

Sebi has now proposed amending this regulation to permit issuers to offer a higher coupon rate or a discount to the issue price for certain investor groups. These incentives would be at the discretion of the issuer, provided details are clearly disclosed in the offer document. The regulator also clarified that the benefits would apply only to original allottees and would not transfer if the bonds are later sold or transmitted.

"It is proposed to permit issuers to offer incentives in the form of higher coupon rate or discount to the issue price to certain categories of allottees like senior citizens, women, armed forces personnel (viz. serving defence personnel, ex-servicemen and widows of ex-servicemen) and retail subscribers to encourage retail participation in debt securities, while providing a fillip to the number of public issuances in the debt market," Sebi said.

To enable this, Sebi suggested adding a condition to Regulation 31 explicitly allowing such incentives for eligible investors.

The regulator noted that similar benefits are already offered in other financial sectors. For example, banks provide higher fixed deposit rates for senior citizens, while NBFCs offer better returns to women depositors. In the equity market, offer-for-sale (OFS) mechanisms let promoters give discounts to retail investors, and outside finance, industries such as aviation extend special discounts to armed forces personnel.

Sebi has invited public comments on its proposal until November 17.