SEBI Proposes to Offer Incentives for Senior Citizens, Women & Armed Forces Investors: Check for Details Here

The Securities and Exchange Board of India ( SEBI ) has released a consultation paper proposing amendments to the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 to permit debt issuers to offer incentives to certain categories of investors - including senior citizens, women, armed forces personnel and retail subscribers.

The proposal has been formulated by the regulator with the aim to encourage wider retail participation in the debt securities market and to promote the overall development of the bond market.

The consultation paper has been issued by the Department of Debt and Hybrid Securities and highlights the need to enhance retail participation in public debt issuances. The Annual Report 2024-25 issued by SEB notes that public debt issuances have declined significantly from ₹19,168 crore in Financial Year (FY) 2023-24 to ₹8,149 crore in FY 2024-25.

The decline has prompted SEBI to explore ways to make public debt offerings more attractive to individual investors through incentives that are commonly seen in other sectors.

Understanding Common Mode of Tax Evasion with Practical Scenarios, Click Here

The instant proposal suggests that debt issuers may be allowed to offer incentives such as a higher coupon rate or discounts on the issue price to select categories of investors. The issuers would exercise the sole discretion to formulate and provide the types of incentives, with the same required to be disclosed upfront in the offer document.

Notably, the incentives would be applicable only to the original allottee and would not extend to subsequent holders if the bonds are transferred or transmitted.

SEBI notes that offering targeted incentives to certain investor categories is already in practice in other financial and non-financial domains. In the banking sector, for instance, senior citizens often receive higher interest rates on fixed deposits while some non-banking financial companies extend preferential rates to women depositors.

Similarly, armed forces personnel are commonly provided travel-related discounts and other financial benefits across various industries. Provision of such preferential treatment to investors in debt securities is touted by the regulator to enhance competitiveness, increase inclusivity and help strengthen the retail investor base in the bond market.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

To facilitate the amendment, SEBI has proposed inserting a proviso to Regulation 31 of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 to permit the incentive structures.

SEBI is now inviting public comments on whether issuers should be permitted to offer higher coupon rates or discounts to certain categories of investors, and if so, which categories should be eligible.

Submit your comments to SEBI's Consultation paper for permitting debt issuers to offer incentives in public issues to certain categories of investors here.

Comments and suggestions can be submitted until November 17, 2025.

In case of any technical issues while submitting comments, stakeholders may contact

Rohit Dubey, General Manager (rohitd@sebi.gov.in)

Appin Gothwal, Assistant General Manager (apping@sebi.gov.in)

Nishtha Tewari, Assistant General Manager (nishthat@sebi.gov.in).

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates