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Informist, Thursday, Sept. 10, 2026

 

--CONTEXT: SEBI Executive Director Cheema's comments at Global Fintech Fest
--SEBI ED Cheema: India Bond mkt cannot continue to be just 'AAA' rtg driven
--SEBI ED Cheema: Fraud in bond defaults very difficult to deal with
 

MUMBAI – The distribution of the bond market must change 'significantly' from the current concentration towards 'AAA' and 'AA' rated bonds for the market to develop in the long-run, Executive Director of Securities and Exchange Board of India Maninder Cheema said at the Global Fintech Fest 2026 Thursday. In terms of issuance, 97% of the bonds are either rated 'AAA' and 'AA' in a market with listed outstanding bonds worth INR 60 trillion, Cheema said.

 

Cheema was interacting with online bond platform providers, which are SEBI-regulated digital intermediaries that allow retail investors to deal in listed corporate bonds, government securities, and non-convertible debentures virtually. Bonds rated below 'AA' are part of a small, growing market, Cheema said. "This skew of more than 97% bonds higher than AA cannot continue because the people who need risk capital may not have AAA and AA retails," she said.

 

Indian corporates with higher ratings may be happy to get funding from investor at very low rates but that doesn't necessarily benefit the economy in the long run. Additionally, investors who prefer investing in top-rated bonds and fixed deposits also end up getting lower returns than lower-rated instruments that offer better returns alongside risks. 

 

"For taking higher risk, we do get higher returns but we hope that the OBPPs (online bond platform providers) and with the help of technology, are able to make investors appreciate the risk and then the return they can get with that national level of risk," Cheema said.

 

Speakers on the panel included IndiaBonds co-founder Aditi Mittal, Wint Wealth co-founder Ajinkya Kulkarni, Chief Executive Officer of Stable Broking Harish Reddy, and founder and Chief Executive Officer of Grip Invest Nikhil Aggarwal. Mittal echoed Cheema's calls and said that if India's growth is to be supported by micro, small and medium-scale enterprises, investors must turn towards corporates that have ratings below 'AA'.

 

Aggarwal said that bond market has faced defaults only in cases of corporate fraud. "There have been very few cases where investors have not recovered money in a secured loan or a secured bond when the company has not had a case of fraud and over a period of time, recovery measures have kicked in," he said.

 

Cheema concurred and said that frauds in the bond market are difficult to deal with. If a company is unable to meet payment obligations on time, barring cases of a fraud, there is a possibility that investors can recover money, she said.  End

 

Reported by Anand JC and Rajesh Gajra

Edited by Akul Nishant Akhoury

 

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