A baby bond is a fixed-income debt instrument with a relatively small face value — typically ranging from ₹1,000 to ₹10,000 per unit in the Indian context, or USD 25 in the US market — designed to make bond investing accessible to retail investors who cannot afford the large minimum investment amounts of standard institutional bonds (which typically have face values of ₹1 lakh to ₹10 lakh or higher). Baby bonds offer smaller investors access to fixed-income returns from government entities, public sector companies, and corporates — democratising bond market participation beyond institutional investors. In India, retail-focused bond instruments with small face values include certain RBI Floating Rate Savings Bonds (₹1,000 face value), listed Non-Convertible Debentures (NCDs) issued by NBFCs and corporates on BSE and NSE with ₹1,000 face values, and Sovereign Gold Bonds (face value linked to gold price). The NSE and BSE have been actively working to develop India's retail bond market infrastructure — including SEBI's 2023 framework for simplified bond issuances — to broaden access to fixed-income instruments for individual investors who currently hold the majority of their non-equity savings in bank fixed deposits.
For android only
