With a view to enhance participation of retail investors in corporate debt market and also to encourage public issuances in the debt market, the Securities and Exchange Board of India or SEBI has considered and approved a proposal for amending SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 to permit debt issuers to offer incentives to certain categories of investors. Currently, issuers of debt securities are not able to offer incentive to any persons for making an application in the issue, except for fees or commission for services rendered in relation to the issue. Pursuant to this amendment, issuers of debt securities will be able offer incentives in the form of additional interest or a discount to the issue price to certain categories of allottees, viz. senior citizens, women, armed forces personnel namely, serving and retired defense personnel and widows and widowers of such personnel, retail individual investors or any other category of investors as may be specified by the Board from time to time. Such incentive shall be available to the initial allottee only and shall not be available in case the debt securities are transferred/ transmitted post allotment. This is expected to increase participation of retail investors and thereby encourage public issuance of debt securities.
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