Sebi Chief Tuhin Kanta Pandey Backs Bond ETFs, Tokenisation as Debt Fundraising Nears Rs 9 Lakh Crore

Why It Matters

A deeper, more accessible bond market will diversify India’s capital‑raising options, support long‑term infrastructure projects, and lower systemic risk tied to banks.

Key Takeaways

• FY26 corporate bond fundraising hit ~Rs 9 lakh crore ($108 bn)
• SEBI plans bond‑linked ETFs to boost retail fixed‑income access
• Tokenisation pilots aim to digitise bond ownership and settlement
• Disclosure standards for listed debt may mirror equity rules
• Retail education programmes slated to increase bond participation

Pulse Analysis

India’s debt‑raising engine is accelerating. In FY 26, corporate bond issuances surged to roughly $108 billion, eclipsing equity financing and signaling investor appetite for longer‑duration capital. This growth reflects a broader policy shift toward market‑based funding, reducing the economy’s dependence on traditional bank loans. For issuers, a robust bond market offers patient capital essential for large‑scale infrastructure, renewable‑energy, and industrial projects that demand multi‑year financing horizons.

To translate this momentum into broader participation, SEBI is piloting exchange‑traded funds (ETFs) that track corporate bonds. By packaging fixed‑income assets into familiar ETF structures, the regulator hopes to lower entry barriers for retail investors, who have historically shied away from individual bonds due to complexity and liquidity concerns. Complementary measures include aligning disclosure standards for listed debt with equity requirements, enhancing transparency and investor confidence. Together, these initiatives aim to create a more liquid, diversified market that can attract both domestic and foreign capital.

Perhaps the most forward‑looking development is SEBI’s exploration of bond tokenisation. Leveraging blockchain technology, tokenised bonds could streamline settlement, cut transaction costs, and provide real‑time ownership records. While still in pilot mode, this digital transformation signals India’s intent to modernise its financial infrastructure and align with global trends. Coupled with targeted investor‑education campaigns, tokenisation and ETF roll‑outs could dramatically expand the retail base, cementing bonds as a cornerstone of India’s capital markets and supporting sustainable economic growth.