The Securities and Exchange Board of India (SEBI) expects the corporate bond market to soon grow at the same pace as equity markets, chairperson Madhabi Puri Buch said on Thursday.

“The transparency that has come in and the way in which there is now technology enablement, we certainly hope that the bond market will rapidly see the kind of growth that we have seen in the equity markets,” Buch said at the Annual General Meeting (AGM) of the Association of Mutual Funds in India (Amfi).

Buch said the building blocks needed for the growth of corporate bond market are already in place. “Now, it is a question of activating those building blocks,” she said. She also highlighted that India saw 8.6 lakh crore of corporate bond issuances last year, but the corporate bond repo is just around 20,000 crore per month.

With SEBI awaiting some approvals from the Reserve Bank of India (RBI), she expects the numbers to rise in the future. “Our strength as a country lies in retail investors,” Buch said, adding that there is a need to encourage their participation in the corporate bond market. She emphasised that the mutual fund industry needs to work as a vehicle to be the voice of retail investors.

“The reality is that retail investor, even today, does not have that consolidated power in order to really assert himself as a shareholder of the company. So, the stewardship code, which has been adopted by the industry… we believe that there is huge value,” she said, adding that there are a lot of expectations from this industry in respect of carrying forward and strengthening the stewardship code.

Also Read

Currently, the markets regulator is using technology to speed up the initial public offering (IPO) approval process and does not take more than three months to approve an IPO from the date of draft paper filing.

Talking about co-creation, Buch said, “Any regulator who is arrogant enough to believe that they know and understand every nuance and can actually make sensible regulations in isolation is set for failure.”

At the AGM, Buch launched a couple of initiatives, including “Bharat Nivesh Yatra”, an investor education campaign on wheels, where 4 buses will visit 170 towns to spread financial literacy.