SEBI Chief Calls For Bigger Role Of Capital Markets In India’s Infrastructure Financing

India’s infrastructure financing requirements will need greater support from capital markets as government spending and bank lending alone may not be enough to meet the country’s long-term development needs, SEBI Chairman Tuhin Kanta Pandey said on Thursday.

Speaking at the NaBFID Annual Infrastructure Conclave, Pandey said a stronger securities market would provide multiple forms of capital as infrastructure projects move from construction to operational phases.

"The securities market is not merely another source of finance for infrastructure. It is an important part of the infrastructure financing ecosystem," he said.

Capital markets to support infrastructure growth

Pandey explained that infrastructure projects require different types of funding at various stages. Early-stage projects need risk capital, while debt financing and refinancing become important as assets progress. Once projects begin generating stable cash flows, capital can be released and invested in new developments.

He said equity, long-term bonds, alternative investment funds (AIFs), real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) can collectively support this financing cycle.

The SEBI chairman also highlighted the increasing importance of the corporate bond market in meeting the funding requirements of infrastructure companies.

According to him, companies have raised more than Rs 4.3 trillion through corporate bonds in FY27 so far, while outstanding corporate bonds have expanded from around Rs 20 trillion in FY16 to Rs 61 trillion by August 2026.

SEBI initiatives to deepen bond markets

Pandey said SEBI has taken several steps to improve access to debt markets, including reducing the electronic book mechanism threshold from Rs 50 crore to Rs 20 crore and introducing measures to encourage retail participation in public debt issues.

The regulator has also proposed easing certain requirements for small-value private debt placements by reducing compliance costs while maintaining investor safeguards.

SEBI is working on improving investor awareness through proposed changes to online bond platform advertising rules and the introduction of a standardised, colour-coded Credit Risk-o-Meter for debt securities.

Pandey also highlighted SEBI’s pilot project involving tokenised corporate bonds, which explores issuing bonds as digital tokens using a private distributed ledger technology network operated by depositories.