Guide · Bonds and fixed income · Updated 2026-09-23

A lower face value changed who can buy a corporate bond, not who will buy it from you

A corporate bond is sold on one fixed number, the coupon, and bought on the assumption that everything else is fixed too. It is not. The price at which a bond can be sold before it matures, and whether anyone will buy it on the day, move with the market and with the bond. Most pages on retail bonds describe the face value, the platforms and the yield, and treat the exit as a footnote.

This page measures the exit on the exchange's own daily files, bond by bond and session by session, after setting out the rules that opened corporate bonds to small tickets. No bond is named, because nothing here turns on which bond it is.

Three rule changes, and the condition that held back the last one

Almost all corporate debt in India is placed privately: SEBI's statistics for 2025-26 show ₹8,99,736 crore raised through 1,924 listed private placements against ₹9,410 crore through 36 public issues, 1.0 per cent of the total. Until the end of 2022 a private placement came in units of ₹10 lakh under SEBI's operational circular of 10 August 2021. The circular of 28 October 2022 cut the unit to ₹1 lakh for issues through new ISINs from 1 January 2023, and gave its reason plainly: non-institutional investors saw the ticket size as a deterrent, and a smaller one would let more of them in and so improve liquidity. The circular of 3 July 2024 allowed ₹10,000 on the same reasoning, and kept the rule that a privately placed bond trades in lots equal to its face value, so a ₹1 lakh bond can never be sold in smaller pieces.

The ₹10,000 unit came with two conditions. The issuer must appoint at least one merchant banker carrying the same obligations as in a public issue, and the bond must pay interest at regular intervals to a fixed maturity with no structured obligations, though listed forms of guarantee and security are allowed. The circular of 18 December 2025 opened the route to zero coupon bonds. Public issues were never covered: their issuer chooses the face value, and practice is ₹1,000.

The exchange's list of debt securities available for trading in its capital market segment, downloaded on 23 September 2026, holds 1,585 corporate bonds. 1,073 carry a face value of ₹1 lakh, 741 of them listed since January 2025; 397 carry ₹1,000, the public issues; and 44 carry ₹10,000, from 17 issuers, the earliest of them listed on 28 July 2025. Their coupons say who has used the small ticket so far: a median of 11.32 per cent, from 9.00 to 13.05, against 7.93 per cent for the ₹1 lakh bonds on the same list. A coupon that high is the price an issuer pays for its credit risk.

SEBI's consultation paper of 27 August 2026 names the cause. The merchant banker requirement, it says, costs a small issue out of proportion to its size, few merchant bankers work in debt, and the delay hurts in a market where yields move quickly; together these discourage frequent small value issues. It proposes to exempt issuers that are regulated by a financial sector regulator, listed for at least a year, free of default for three financial years, and issuing senior secured bonds rated AA- or better. Comments closed on 17 September 2026, and SEBI's list of circulars showed no final decision on 23 September. Until one comes, the statement that any corporate bond can now be bought for ₹10,000 describes a permission, not the market.

An online bond platform is a broker, not a market

The platforms that sell these bonds are regulated as brokers. Since November 2022 an online bond platform provider must be a company registered as a stock broker in the debt segment of a stock exchange (regulation 51A of the NCS Regulations; chapter XXI of SEBI's NCS Master Circular of 15 October 2025), and every order it takes in a listed bond must be routed through an exchange's request for quote platform and settled through the clearing corporation, trade by trade, with the trade cancelled if either side fails to pay in. The exchange's list, updated on 16 September 2026, names 41 providers, 36 of them enabled; the other exchange's names 37, 34 active. What they may sell is fixed: listed debt, debt being listed through a public issue, government securities, gold bonds, and other regulated products under a separate tab. The circular of 14 August 2026 added products regulated by the IFSC authority and capital gains bonds under section 54EC, which the platform must label as tax products that cannot be transferred.

The request for quote platform, launched by both exchanges in February 2020, is a negotiation screen rather than an order book: an initiator asks for quotes, a responder offers one, and a deal exists only when a quote is accepted (chapter XXII). Nothing on it obliges anyone to bid for a bond a retail holder wants to sell, and nothing in the framework obliges a platform to buy back a bond it sold. Unlisted bonds sit outside all of it. A platform may not offer them, link to a site that does, or let an affiliate trade on its name to sell them, clauses written after SEBI found platforms doing exactly that; and since 23 July 2024 a gain on one is taxed at slab rates however long it is held.

The capital market segment is the second exchange route. Debentures admitted to it trade like shares, through any stock broker, one bond per lot, settled the next working day, at a dirty price, one that includes the interest accrued since the last coupon, as the exchange's market watch for these bonds states. On the 8,251 bond-days on which the same bond traded on both venues, the order book's average price per 100 of face value sat a median 0.80 above the reporting platform's clean price. The third route exists only if the issuer wrote it in. Since 1 November 2024 an issuer may attach a liquidity window (chapter XXVI): after the bond's first year, a put option opens for three working days on a monthly or quarterly schedule, and tendered bonds are paid within one working day at no more than 100 basis points below a valuation made on mutual fund norms, plus accrued interest. The issuer sets a lifetime limit of at least 10 per cent of the issue, tenders beyond a window's share are accepted pro rata, and the window may be kept for retail holders, those with no more than ₹2 lakh of face value.

The order book, counted bond by bond

The exchange publishes each day's trading in every security in its capital market segment in a common bhavcopy, with the ISIN, the number of trades and their value. Across the 247 sessions from 19 September 2025 to 18 September 2026, 596 different corporate bonds traded at least once. On the median session 143 did, in 782 trades worth ₹6.69 crore in all, and the median trade was worth ₹36,105.

The count means something only against the list. Of the 1,585 corporate bonds on it, 1,067 were there for all twelve months, and 683 of those, 64 per cent, did not trade on a single session. The median bond traded on none; the bond at the 75th percentile traded on 21 sessions and the one at the 90th on 96. Only 20 traded on nine sessions in ten or more.

Face value splits the list into two markets. The public issues in ₹1,000 units are where retail trading lives: 294 of the 364 on the list all year traded at least once, the median one on 30 sessions. The privately placed bonds in ₹1 lakh units almost never trade here: 57 of 640. The ₹10,000 bonds, nearly all listed inside the window, traded on a median 7.1 per cent of the sessions since their listing, half the rate of the ₹1,000 bonds, and 16 of the 38 with at least twenty sessions on the list had not traded at all.

Nor has the order book broadened as the tickets shrank. The median number of corporate bonds trading on a session was 143 in 2024, 133 in 2025 and 144 in 2026 to date. The older full bhavcopy, which carries 85 per cent of the common file's debt rows on the sessions both cover, puts 2022 and 2023 at no fewer than 135 and 136.

More trades are not the same thing as more liquidity

Retail participation did grow, and fast. SEBI's statistics on trades in corporate bonds show listed trades settled through the two main clearing corporations rising from 11,00,916 in 2024-25 to 26,83,066 in 2025-26, 2.44 times, while the money traded rose 1.22 times, so the average trade fell from ₹1.41 crore to ₹70.7 lakh. SEBI's consultation paper of 21 August 2026 on distribution through the platforms puts trades on the request for quote platforms at 2.76 lakh in 2024-25 and 17.84 lakh in 2025-26, a rise of 546 per cent, and attributes it primarily to retail participation through the online platforms. That rise of 15.08 lakh trades is close to the whole increase in listed trades settled, 15.82 lakh.

Every over the counter trade in a listed bond has to be reported to an exchange within fifteen minutes (chapter XVI of the Master Circular), and the exchange's corporate bond bhavcopy for its reporting platform publishes those trades, with the request for quote trades settled through its clearing corporation, one row per bond per session. It shows the same shift bond by bond. On the median session of 2022, 139 different corporate bonds traded there, at a median ₹5.00 crore each; in 2026 to date, 517, at a median ₹22.0 lakh. Bond-days worth less than ₹10 lakh went from 2 per cent of the total to 37 per cent.

That breadth is real, and it is concentrated. Over the twelve months to 18 September 2026, 5,207 different corporate bonds traded on this exchange's platform, and the median one did so on 6 of 242 sessions, against 4 to 6 in each calendar year since 2022; 19 per cent traded on one session only. What changed is the head of the distribution. 249 bonds traded on more than half the sessions, against 6 in 2022. Those 249 carried 38 per cent of the bond-days and 50 per cent of the bond-days under ₹10 lakh, but only 14 per cent of the money, at a median ₹11 lakh a bond-day against ₹46 lakh for the rest, and their median traded yield was 11.12 per cent against 8.94 per cent. In this file, the platforms' growth shows up as a few hundred high yield bonds trading in small tickets on most sessions. It has not changed how often the typical listed bond trades, and the file carries no side, so it cannot say how often the retail holder was the one selling. For scale, SEBI's table of outstanding corporate bonds counted 35,639 instruments at the end of December 2024, its latest quarter.

What thin trading does to the price you get, and when

For a holder, thin trading comes down to two numbers: how long until the bond trades at all, and how far from the last price it trades. Take every bond on the capital market list all year and every session that left at least 21 more before the window closed, and count how soon the bond next traded.

A holder of a public issue bond who decides to sell on a random session sees a trade in it that same session about one time in four, and within a calendar month two times in three. For a ₹1 lakh private placement the same figures are 1.3 and 5.8 per cent. The order book is not a working exit for that bond; its route out runs through the request for quote platform, where the file cannot show how often a bid was waiting.

When a bond does trade, the price is set between a handful of orders. 32 per cent of the bond-days in the window had a single trade. On bond-days with two or more, the gap between the day's highest and lowest trade was a median 0.31 per cent of the closing price, 0.91 per cent at the 75th percentile and 2.16 per cent at the 90th. Restated as yield: on a three year bond with a 10 per cent annual coupon priced at 100, a sale 2.16 per cent lower hands the buyer about 88 basis points a year of extra yield, all of it out of the seller's return.

Three habits follow from those numbers. A limit order is the only protection a thin book offers, because a market order takes whatever the best bid happens to be. An order book price includes accrued interest, so it has to be set against a platform's dirty price, not its clean one. And a ₹1 lakh bond is a single lot: a holder who needs ₹30,000 cannot sell part of it. The liquidity window, where an issue carries one, is the only exit whose price is fixed in advance, at most 100 basis points, one per cent, below the valuation, on dates and up to limits the issuer chose. It is worth reading for in an offer document; it is not a feature of the market.

Credit, liquidity and the call are three separate risks

A rating answers one question: how likely the issuer is to pay on time. It says nothing about whether the bond can be sold before then, and nothing about whether the issuer may repay early. SEBI's consultation paper of 13 August 2026, proposing a colour coded Credit Risk-o-Meter for debt securities, drafts the disclaimer itself: the meter reflects only credit risk, and debt securities remain subject to market and liquidity risks.

Credit risk has a simple arithmetic. The ₹10,000 bonds on the exchange's list pay a median 3.39 percentage points more than its ₹1 lakh bonds. If nothing is recovered after a default, that extra coupon is used up by an annual default probability of about 3.4 per cent; if 40 per cent is recovered, by about 5.7 per cent. The coupon gap is measured and the recovery rates are illustrative assumptions, with tax and timing ignored. A higher coupon is payment for a risk, not extra income.

The call is the risk readers miss, because it bites only when things go well. Regulation 15 of the NCS Regulations lets an issuer reserve the right to redeem early, and to give holders a put, on terms fixed in the offer document, never within a year of issue, with at least 21 days' notice to holders and interest at 15 per cent a year on any delay in paying. An issuer calls when it can refinance more cheaply, which is exactly when the bond's price would otherwise have risen.

In the illustration a 10 year 9 per cent bond callable at par from year 3 is worth 105.25 at a 7 per cent yield, against 114.05 without the call. If it is called in year 3 and the 100 is reinvested at 7 per cent, the holder earns 7.55 per cent a year over the decade instead of 8.42: the call moved the benefit of lower rates from the holder to the issuer. The three risks also fail separately. A well rated bond can be impossible to sell for weeks, a bond that trades every session can default, and a bond that does neither can be repaid in its third year.

The tax, as it stands for 2026-27

A coupon is income at the slab rate in the year it arrives, and a gain on sale is a capital gain whose rate depends on whether the bond is listed and how long it was held. The Finance (No. 2) Act 2024 set the current rates from 23 July 2024, the Finance Act 2023 put listed debentures inside tax deduction at source, and the Finance Act 2025 added a ₹10,000 threshold.

Three points trip holders up. The deduction at source is a prepayment, not the tax, so the interest belongs in the return at the slab rate whether or not anything was deducted. A bond bought above face value and held to maturity produces a capital loss at redemption, and that loss can be set off only against capital gains, never against the coupons that made up for it. And whether a bond is listed now decides its tax as well as its exit.

What a listed corporate bond is for

Read together, the rules and the files describe an instrument that is easy to buy in small pieces and should be bought as if it will be held to maturity. The face value cuts widened who can buy. The platforms made buying convenient and moved it onto the exchanges' request for quote platforms. Neither puts a bid under a bond on the day its holder needs to sell, and the order book open to every broker's client trades about as many corporate bonds a session as it did in 2022. A bond bought for its coupon should be judged on the issuer's ability to pay that coupon for the whole term, on its call terms and on whether it carries a liquidity window, with an exit before maturity treated as a possibility to be priced rather than a feature to be assumed.

Pricing a bond from its cash flows and restating a price concession as yield is the same arithmetic as in the guides to bond price and yield and duration and convexity. The government route is in the guide to Retail Direct, the fund route and its tax in the guide to debt funds after the tax change, and the cost of trading into a thin book in the guide to impact cost. It is taught here as method rather than as a list of bonds: check a number against the exchange's own files before trusting it.