Grip Invest launches first privately placed Rs 10,000 face value bonds

Alternative investment platform Grip Invest on Tuesday announced the launch of India's first-ever privately placed Rs 10,000 face value investment-grade bond. Akara Capital Advisors, in partnership with Grip, plans to raise Rs 20 crore through the issuance of bonds maturing in 18 months at a return of 14 per cent.

One part of the issuance worth Rs 6.5 crore was launched on the Grip platform, which was fully subscribed, said Nikhil Aggarwal, Founder & Group CEO, Grip.

In July of the current year, markets regulator Sebi cut the face value of debt securities to Rs 10,000 from Rs 100,000. The move is expected to make bond investments more appealing and attainable for a broader spectrum of retail investors. Sebi has also standardised the record date to 15 days prior to any interest payment or redemption date. Previously, the date for determining who is eligible to receive interest or principal repayments on non-convertible debentures (NCDs) (record date) could differ depending on the issuer.

“The broader accessibility that this bond option offers is a turning point for the bond market. Historically, Rs 1,000 bonds were offered only by a limited number of companies. However, with Sebi's recent decision to reduce the minimum face value to Rs 10,000 for privately placed bonds, we see a unique opportunity for the market to expand. This is expected to make bond supply go 100 times, along with greater diversity of risk-reward, resulting in an influx of retail investors that aim for high yields, boosting overall liquidity of the bond market as well as stimulating active trading in the secondary market,” said Aggarwal.

In October 2022, Sebi had reduced the face value of corporate bonds to Rs 1 lakh from Rs 10 lakh.

Typically, corporate bond investments in India have been inaccessible to many retail investors due to the high minimum investment threshold. With most corporate bonds requiring a face value of Rs 100,000, this substantial entry point effectively excludes smaller investors who may be interested in the advantages these bonds offer.