The Securities and Exchange Board of India (Sebi) in 2022 introduced a regulatory framework for online bond platforms (OBPs), creating a new, regulated ecosystem where investors can buy and sell listed corporate bonds.
Today, more than 25 OBPs are registered with Sebi, and trading volumes have steadily risen, reflecting growing investor interest. According to industry estimates, OBPs facilitated transactions worth ₹500 crore in January 2025. However, while access has improved, the process of buying and selling bonds remains complex.
Mint breaks down the process.
Understanding bond pricing
Bond pricing involves two key concepts: the clean price and the dirty price.
The clean price reflects the bond’s intrinsic value based on prevailing interest rates and excludes accrued interest. The dirty price, which is what the buyer actually pays, includes both the clean price and any interest accrued since the last coupon payment.
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The clean price move inversely to interest rates. For instance, bonds with a 10% coupon and a face value of ₹1,000 may trade at ₹1,050 if yields drop to 9%, or at ₹950 if yields rise to 11%.
What platforms must disclose
In addition to basic bond details, OBPs must display the bond’s latest credit rating and the issuer’s information memorandum—a key disclosure document.
This memorandum contains crucial information such as the issuer’s financial statements, risk factors, details of any ongoing legal or tax proceedings involving the company or its senior leadership, whether the company or any director is classified as a wilful defaulter, and shareholding patterns.
The RFQ mechanism
OBPs are mandated to route transactions through the Request for Quote (RFQ) mechanism available on stock exchanges. This ensures that trades are executed transparently and settled through exchange-clearing corporations. Investors must have—or open—a demat account to use OBPs.
“The RFQ is like an electronic order-matching system that facilitates requesting and receiving of quotes. Orders are matched with the bond seller depending on the quantity and the bidding price,” said Anshul Gupta, co-founder of Wint Wealth.
Once matched, the transaction is reported to the relevant platform—CBRICS (Corporate Bond Reporting and Integrated Clearing System) for the National Stock Exchange, and NDS-RST for the BSE.
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Following this, the investor must transfer funds 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 the funds and bond quantity match, the money is transferred to the seller and the bonds to the buyer’s demat account.
Can investors exit early?
While premature exits are possible on OBPs, they’re not always straightforward, as India’s corporate bond market still suffers from low liquidity.
In some cases, an OBP might offer to buy back the bond directly or initiate a one-to-many RFQ, where multiple potential buyers can place bids. More commonly, platforms offer a one-to-one RFQ, where they themselves may buy the bond to provide an exit.
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However, this doesn’t guarantee the best price, and in cases where the OBP chooses not to buy, the investor may be unable to exit.