SEBI's Move To Lower Bond Value Opens Opportunities For Retail Investors: Zerodha Founder Nithin Kamath

A fixed deposit (FD) entitles you to a lower interest rate, while the stock market offers good returns with a high risk. A question always arises before the investors where to invest their money. Zerodha co-founder Nithin Kamath has suggested a better investment option to keep your money safe and secure.

Kamath is very active on social media and often shares investment tips. He has highlighted bonds as a better and safer investment option than fixed deposits (FDs) and the stock market, offering better returns with lower risk.

His advice comes after the Securities and Exchange Board of India (SEBI) reduced the face value of debt securities from Rs 1 lakh to Rs 10,000 and is considered an important step to boost the participation of retail investors in the bond market.

The decision was taken after the meeting of SEBI board members held recently. SEBI said in a press release that to increase the participation of non-institutional investors in the bond market as well as to protect such investors, the board has also approved the issuance of bonds with a face value of Rs 10,000. It was said that retail investors will be able to participate in Non-Convertible Debentures (NCDs) or Non-Convertible Redeemable Preference Shares (NCRPS) through private placement mode.

Nithin Kamath praised SEBI’s decision, stating that it opens up opportunities for common investors to earn fixed income through bonds.

Kamath wrote on social media platform X, “Companies can now issue bonds with a face value of Rs 10,000. This is an excellent step, which can increase the participation of common investors in bonds. SEBI has made this amazing change in some of the changes that have taken place in the last few years, due to which common investors have got access to bonds.”

Kamat had earlier expressed his anger several times due to the high face value of bonds which often exceeds Rs 10 lakh and highlighted the challenges retail investors face.