Rising interest in retail trading of high-yield corporate bonds reflects shifting investor strategies in a changing market

Synopsis

Online platforms now offer retail investors access to corporate bonds. These securities provide mid-teen yields with low minimum investments. Retail investors are increasingly participating in the corporate bond market. This trend is driven by flat equity markets and regulatory changes. Online platforms and reduced face values ease investor access to debt.

Mumbai: The high-yield corporate bond market is moving beyond HNIs and institutions as online platforms bring securities offering mid-teen yields within reach of retail investors, with minimum tickets as low as ₹10,000.

This shows a sharp change in access to corporate debt. While structured financings such as Shapoorji Pallonji (SP) Group bonds have carried ₹1 crore face values and minimum investments of ₹10 crore, investors can now buy bonds of lower-rated companies in much smaller denominations.

Exchange data also point to rising retail activity, with the number of transactions more than doubling to 2.8 million in FY26. In the first quarter, more than a million trades have already been made, and if this pace continues, the number could go up to 4.1 million, according to Vishal Goenka, co-founder, IndiaBonds.

ET Bureau

Yields range from around 9-10% for AA-rated non-bank lenders to more than 13% for BBB-rated issuers. Moneyboxx Finance, rated CRISIL BBB, has a bond with a 10.2% coupon offering yields of around 12%, with a minimum investment of ₹10,000. ReGreen Excel EPC India, rated CARE BBB, offers an 11.5% coupon and 13.5% yield, with a minimum investment of ₹1 lakh.

"As equity markets have flatlined for a couple of years, the need for a balanced portfolio and regular returns is moving retail to corporate bonds," said Goenka. "This has been further accelerated by regulatory tailwinds like reduction in face value of bonds and also the advent of online bond platforms, which make access easier."

Real estate-linked issuers also feature prominently among higher-yield offerings. Embassy KSL Realty Ventures, rated Acuite BBB-, offers a 13.4% coupon, although its minimum investment is ₹2.5 crore.

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At the other end of the spectrum, some like Muthoot Fincorp, rated CRISIL AA, offers yields of around 9.3%, with some higher-rated bonds also available to investors.

"The attraction is particularly strong in A rated and BBB rated entities," said Venkatakrishnan Srinivasan, managing partner at Rockfort Fincap, a debt advisory firm. "It also offers high-yield bonds of BBB- offering 12-14% or even higher returns."

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