India's Securitisation Market Breakthrough Lies in Simplicity: SEBI

SEBI's Maninder Cheema said India's securitisation market needs simple, easy-to-understand products to grow. She pointed to the success of REITs and InvITs and confirmed a pilot project to deepen the bond market and boost retail participation.

The true breakthrough for India's securitisation market lies in simplicity, said Maninder Cheema, Executive Director of the Department of Debt and Hybrid Securities (DDHS) at SEBI on Friday.

Speaking with media on the sidelines of the 14th Securitisation Summit 2026, Cheema noted that the market needs clear, easy-to-understand products to scale sustainably, arguing that establishing a direct link between an asset's revenue stream and the end investor is critical at this stage of India's economic growth.

Simple Structures as a Model for Success

"Monetization takes place naturally when the structure is transparent," Cheema noted, pointing to the success of municipal bonds, Real Estate Investment Trusts (REITs), and Infrastructure Investment Trusts (InvITs). "In a way, municipal bonds are monetising the revenues within the municipality. REITs and InvITs are monetising the revenues which various real estate and infrastructure assets are earning."

Cheema said, these instruments are highly effective because the connection between the underlying revenue and the investor's return is completely straightforward. "Those are simpler to understand products, and the connect between the revenue towards the investor is very straightforward. Those products may appeal to investors more than complex securities, and may serve the market more before there is a more active requirement for intricate securities deployment," she explained.

SEBI's Regulatory Roadmap

Addressing regulatory next steps, Cheema highlighted SEBI's upcoming framework aimed at deepening bond market participation. Following the roadmap previously laid out by the SEBI Chairperson, she confirmed a clear timeline for implementation. "It's going to be a pilot project, and a timeline of six to nine months has already been given," Cheema stated.

She added that the initiative would build upon existing institutional precedents, noting, "The RBI has already done this on the securitization of certificates of deposit issued by some banks where there were other bank participants. It is going to be following on those lines."

Boosting Retail Participation and Accessibility

To ensure the success of these fixed-income structures, Cheema underscored the immediate need to scale up retail participation in corporate bonds and non-equity asset classes. She revealed that industry associations, market exchanges, and regulators are aggressively conducting investor awareness campaigns to bridge the literacy gap.

Furthermore, structural access remains a major focal point for the regulator. "There is also a discussion around allowing a distributor framework for corporate bonds," Cheema concluded, indicating that a formalized distribution network will be instrumental in making safe, fixed-income assets accessible to the broader public.

(ANI)

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