The landscape of retail investing in India is undergoing a significant transformation as online bond platforms (OBPs) experience unprecedented growth, making corporate bond markets accessible to everyday investors with minimal entry barriers.
The Digital Revolution in Bond Investing
Since their introduction in 2022, online bond platforms have witnessed a remarkable surge in activity. Monthly transaction volumes have tripled from approximately ₹500 crore last year to an impressive ₹1,500 crore currently, according to industry executives tracking this emerging sector.
Anshul Gupta, co-founder of SEBI-registered platform Wint Wealth, highlights the pivotal regulatory change driving this growth: "Until recently, the minimum investment threshold for bonds stood at ₹1 lakh. The Securities and Exchange Board of India's decision to reduce the face value to ₹10,000 a few quarters ago has enabled retail investors to comfortably explore this asset class, resulting in strong adoption rates."
The impact of this shift is clearly visible in RFQ (request-for-quote) trading data. According to National Stock Exchange figures, RFQ trades skyrocketed from 43,000 in April 2025 to over 154,000 by October 2025, demonstrating rapidly increasing retail participation.
How Online Bond Platforms Work
India currently hosts 44 SEBI-registered online bond platforms that function as marketplaces for corporate bonds. These platforms have democratized access to fixed-income securities that were previously dominated by institutional players.
The account setup process is entirely digital and streamlined. Investors begin by selecting a platform and registering with basic contact information. The platform then completes KYC verification using PAN and Aadhaar-based authentication. Since listed bonds must be held in dematerialized form, investors must link an existing demat account or create a new one.
Once banking and demat details are established and disclosures electronically signed, investors can browse available bonds, compare yields and pricing structures, and execute buy or sell orders through the RFQ mechanism.
Understanding the Risks and Rewards
While the accessibility of corporate bonds has improved dramatically, financial experts caution investors about potential pitfalls. Joydeep Sen, a corporate trainer specializing in financial markets and published author, warns: "Retail investors might naturally gravitate toward bonds offering the highest yields, expecting superior returns. However, they may overlook the fundamental relationship that higher yields typically indicate higher credit risk."
Sen emphasizes the importance of due diligence: "Investors should carefully examine credit ratings, which online bond platforms are mandated to disclose. Additionally, assessing the business group behind the issuing company provides valuable context. All other factors being equal, a company affiliated with a larger, more established business group generally carries lower risk."
For investors uncertain about directly evaluating bond risk-return profiles, debt mutual funds that specialize in corporate bonds present a viable alternative. Regardless of the approach, investors should exclusively use SEBI-registered online bond platforms for direct corporate bond transactions.
Transparent Trading Mechanisms
Online bond platforms operate through a structured, exchange-linked framework that prioritizes transparency. The RFQ system serves as the electronic backbone, enabling investors to solicit and receive competitive quotes on debt securities.
When an investor places an order, the platform aggregates quotes, matches the order, and routes the transaction to the appropriate exchange for settlement through designated clearing corporations. Each RFQ transaction is automatically reported to exchange platforms—Corporate Bond Reporting and Integrated Clearing System (CBRICS) for NSE and NDS-RST for BSE.
Following trade execution, investors transfer the investment amount to the clearing account of the relevant exchange's clearing corporation—Indian Clearing Corporation Ltd (ICCL) for BSE or NSE Clearing Ltd (NSECL) for NSE. Once amounts and bond quantities are reconciled, the investment is transferred to the seller while bonds are credited to the buyer's demat account, ensuring uniform and traceable transactions across platforms.
Selling Simplified Through RFQ Options
The selling process mirrors buying through the RFQ mechanism. Platforms typically offer two primary RFQ methods: OTO (one-to-one) and OTM (one-to-many).
Vishal Goenka, co-founder of IndiaBonds, explains their comprehensive approach: "We facilitate direct purchasing from clients and also assist in finding buyers when investors wish to sell their bond holdings."
In OTO RFQ transactions, the platform directs the investor's sell request to a single counterparty—often the platform itself—which may purchase the bond at the quoted price. While this method offers speed, it limits price discovery since only one buyer participates, and if that buyer declines, the investor might not secure an exit.
Conversely, OTM RFQ broadcasts the same quote request to multiple market participants simultaneously, allowing numerous potential buyers to respond. This approach fosters competitive pricing and enhances the likelihood of finding a buyer.
Nikhil Aggarwal, founder and group CEO of Grip Invest, clarifies the selling process when demat accounts are linked: "When sellers choose to liquidate positions on our platform, we provide current buying interest prices. The seller then places the sell order through their broking account at the indicated price, the order matches, and the bond transaction completes."
Navigating Bond Pricing Dynamics
Understanding bond pricing represents another crucial aspect of navigating online bond platforms effectively. These platforms display both clean and dirty prices, providing investors with comprehensive pricing information.
The dirty price reflects the total expenditure for buyers, incorporating accrued interest accumulated since the last coupon payment. Meanwhile, the clean price isolates the bond's intrinsic value based solely on interest-rate movements. Since yields and clean prices share an inverse relationship, the clean price enables investors to calculate yield to maturity and compare different bond options.
While exchanges typically display only dirty prices, the clean-price visibility on online bond platforms offers significant analytical advantages to retail investors making informed decisions.
