How NRIs Can Invest in Corporate Bonds

Corporate bonds, including Non-Convertible Debentures (NCDs), offer fixed or predictable returns and can help diversify an investment portfolio. Non-Resident Indians (NRIs) planning to invest in Indian corporate bonds can do so via primary issuances as well as through secondary markets. There are multiple ways (such as stock exchanges, online bond investment platforms and bank-facilitated routes under PIS) through which NRIs today can invest in bonds in India. However, choosing the right platform can help NRIs make informed investment decisions in India’s corporate debt market.

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Ways NRIs Can Invest in Corporate Bonds in India

NRIs can invest in corporate bonds either directly through market-linked platforms or indirectly through managed investment options. Some of the ways to achieve this is given below:

1. Through Stock Exchanges (Demat & Trading Account)

NRIs can invest in listed corporate bonds through stock exchanges using a Demat and trading account. Corporate bonds are available on exchanges such as the National Stock Exchange of India and BSE Limited.

How does this work:

• Open an NRI Demat and trading account with a SEBI-registered broker.
• Link the account to an NRE or NRO bank account.
• Buy and sell listed corporate bonds in the secondary market.
• This route is suitable for NRIs who want flexibility to trade bonds before maturity

2. Through Primary Issuance of Bonds (NCDs)

NRIs can invest in corporate bonds at the time companies issue them to investors. Companies offer Non-Convertible Debentures (NCDs) to the public and NRIs can apply through:

• Broker platforms
• Online investment portals
• Bank-supported application processes
• Private Placements

Some bonds are issued to select investors through private placements and are usually accessed via wealth managers and institutional brokers. This route allows NRIs to invest at the time of issuance, often at predefined interest rates.

3. Through Online Bond Platforms

NRIs can invest in corporate bonds through digital bond marketplaces that provide access to multiple bond options in one place. These platforms typically offer:

• Listed and unlisted corporate bonds
• Yield comparison across issuers
• Secondary market access

Investments are executed through linked Demat accounts and bank accounts, making the process seamless.

4. Through Banks Under the PIS Route

NRIs can invest in corporate bonds with the involvement of banks under the Portfolio Investment Scheme (PIS) regulated by the Reserve Bank of India.

How does this work:

• Open a PIS account with an authorised bank
• Link it to a Demat and trading account
• Execute transactions through a broker

Note that the bank manages fund routing and regulatory compliance. The actual purchase of bonds happens through stock exchanges or issuances.

5. Through Mutual Funds (Indirect Investment)

NRIs who prefer a simpler approach can invest in corporate bonds indirectly through mutual funds. These include the corporate bond funds, target maturity funds and other debt mutual funds.

This route offers:

• Professional fund management
• Diversification across multiple issuers
• Lower effort compared to direct bond investing

Investing Made Easy with Bonds

 Interest paid monthly/quarterly

 Invest as low as ₹1,000

Invest Now

Earn Up to

13.25%

Exclusively on Bonds

Key Requirements for NRIs Planning to Invest in Bonds

To invest in corporate bonds in India, NRIs typically need:

• PAN card
• KYC-compliant documents
• NRE or NRO bank account
• Demat and trading account

Key Considerations for NRIs Before Investing in Bonds

• Corporate bonds carry credit risk, unlike government bonds
• Returns depend on the issuer’s financial strength
• Liquidity may vary, especially for lower-rated bonds
• Taxation applies to interest income and capital gains