Buying corporate bonds directly: How safe is the settlement process for Rs 10k ticket sizes?

Question

I want to start diversifying my debt portfolio beyond bank FDs.

I saw that I can now buy listed corporate bonds and SDIs for just Rs 10k.

How does the actual transaction work? Do I transfer money to the platform, and what is the counterparty risk if the platform goes bust?

Sachin Kabra · Accepted Answer

SEBI's Online Bond Platform Provider regulations have completely eliminated counterparty settlement risk by routing all transactions directly through the stock exchange. Historically, the face value of bonds was Rs 10L, which kept retail investors entirely out of the market. Recently, this was drastically reduced to Rs 1L, and now down to just Rs 10k for listed SDIs issued by NBFCs.

This 99% reduction in face value has democratized access, allowing you to start building a bond portfolio with much smaller amounts. When you make a purchase, you do not transfer your funds to the bond platform or distributor. Instead, transactions are settled directly through the stock exchange on a T+1 basis.

You transfer your funds to the exchange using UPI or net banking, and you receive the bond units directly in your demat account the very next day. This regulatory blessing has legitimized the space and ensures that even if the platform you use goes out of business, your bonds are safely held in your own demat account. Most first-time investors start with a small test amount like Rs 10k or Rs 60k, wait for their first interest payout to build trust, and then scale their portfolios over time.

Disclaimer: All information shared above are strictly for educational and informational purposes only. It should not be construed as financial or investment advice.

Buying corporate bonds directly: How safe is the settlement process for Rs 10k ticket sizes?

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