ETMarkets Smart Talk | Jiraaf clocks 15x growth in two years as retail investors embrace bonds: Vineet Agrawal

Improved digital access, greater regulatory oversight and rising awareness are accelerating retail participation in the bond market.

Reflecting this shift, online bond platform Jiraaf has recorded nearly 15x growth over the past two years, with the average investment size crossing Rs 1.5 lakh, signalling that investors are making meaningful allocations rather than merely experimenting with the asset class.

In this edition of ETMarkets Smart Talk, Vineet Agrawal, Co-founder of Jiraaf, discusses why bonds are becoming a permanent part of Indian portfolios, the financialisation of fixed income, how investors should evaluate yields, and why diversification within fixed income is becoming increasingly important in a falling interest-rate environment. Edited Excerpts –

Q) As fixed deposit rates moderate, many investors are moving towards bonds and alternative fixed-income products. How do you see the trend taking shape?
A) As the economy matures and interest rates moderate, investors are beginning to reassess traditional fixed-income choices. A one-year FD that offered around 8.5% in 2015 is now closer to 6.9%, a decline of nearly 160 basis points over the decade. For investors, this means post-tax returns may not always keep pace with inflation or long-term financial goals.

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This is where government bonds and investment-grade corporate bonds are gaining relevance. Investors are not necessarily moving away from FDs completely, but they are realizing the need to diversify within fixed income. A part of the portfolio is now being allocated to bonds and other regulated fixed-income instruments that can offer better return potential while helping investors balance risk, liquidity, and maturity.

Q) Industry data suggests retail participation on online bond platforms has grown sharply in recent years. Please share numbers. How has your platform grown?
A) Retail participation in bonds has grown meaningfully as awareness, digital access, and regulatory oversight have improved. Online Bond Platform Providers have made it easier for individual investors to evaluate, compare, and invest in bonds more transparently.

At Jiraaf, we have seen nearly 15x growth over the last two years, reflecting rising interest among retail investors in fixed-income products beyond traditional deposits. The average ticket size per investment is now upwards of ₹1.5 lakh, indicating that investors are allocating meaningful sums to this asset class rather than treating it as a trial investment.

This gives us confidence that bonds are gradually finding a more permanent place in Indian portfolios, especially among investors seeking fixed returns, defined maturities, and regular payouts.

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Q) Do you believe India is witnessing the “financialization of fixed income” similar to what happened in equities over the past decade?
A) Yes, India is at the early stage of a similar journey in fixed income. Over the last decade, equities have become mainstream as access has improved, digital platforms have simplified investing, and investors have become more comfortable with market-linked products. A similar shift is now beginning in bonds.

For a long time, fixed income for retail investors was largely limited to FDs, small savings schemes, and debt mutual funds. Direct bonds were seen as difficult to access or understand. That is changing with online bond platforms, improved disclosures, SEBI regulations, and lower minimum investment sizes.

As investors seek diversification, fixed returns, and greater visibility into cash flows, bonds are becoming a more active part of portfolio construction. The financialization of fixed income will be gradual, but the direction is clear.

Q) A common market observation is that the highest yields often signal the highest risks. How should retail investors distinguish attractive yields from red flags?
A) Investors should avoid looking at yield in isolation. A higher yield is not automatically better; it is often the market’s way of pricing higher credit, liquidity, or business risk. The first step is to check the credit rating, issuer profile, repayment history, sector exposure, and whether the bond is secured or unsecured.

Investors should also compare the yield with similarly rated bonds. For example, if most bonds in a rating category are offering 10–11% and one bond offers 14%, the higher yield needs deeper evaluation. It may still be a valid opportunity, but it should not be chosen only for the headline return.

Retail investors should diversify across issuers, maturities, and ratings, and prefer investment-grade bonds aligned with their risk appetite. The focus should be on risk-adjusted returns, not just the highest available yield.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)