SEBI Orders Immediate Halt on Unlisted Bond Services by 3 Online Platforms

The Securities and Exchange Board of India (SEBI) has instructed 3 online platforms—Altgraaf, Tap Invest, and Stable Investments—to immediately cease offering services related to unlisted bonds. This action is part of a broader investigation into regulatory violations and possible fraudulent activities in the sector. In its notice issued on Monday, SEBI highlighted concerns over the platforms’ non-compliance with licensing norms.

Altgraaf: Major Player Under Scrutiny

Altgraaf, operated by AI Growth Private Limited, has been a significant player in the unlisted bonds market, facilitating the sale of non-convertible debentures (NCDs) worth over Rs 4,400 crore for 75 companies. Founded in 2021 by Vineet Agrawal and Sourav Ghosh—who are also behind the regulated fixed-income platform Jiraaf—Altgraaf reportedly used private placements to acquire NCDs before making them available to retail investors. SEBI flagged this practice as an attempt to bypass regulatory oversight, raising questions about the platform’s compliance with regulations.

Tap Invest: Raising Funds Without Proper Licensing

Tap Invest, launched in the same year as Altgraaf, has raised approximately Rs 400 crore in NCDs for over 100 companies. The platform, backed by investors such as QED Innovation Labs and Snow Leopard Capital, is now under SEBI’s scrutiny for similar concerns regarding its business practices. The regulator’s investigation focuses on whether Tap Invest violated licensing requirements and engaged in any fraudulent activities.

Stable Investments: Mumbai-Based Firm Also Under Investigation

Stable Investments, a Mumbai-based firm founded in 2022 by University of California, Berkeley graduate Kanishk Ranka, is also under investigation. SEBI is currently assessing the total amount raised by Stable Investments through its operations, examining whether it adhered to the proper regulatory frameworks for bond issuance and investor protection.

SEBI’s Regulatory Framework for Unlisted Bonds

Under SEBI’s rules, retail investors are only allowed to purchase unlisted corporate bonds and NCDs through entities registered as stock brokers with recognized exchanges. These entities are classified as Online Bond Platform Providers (OBPPs). However, during routine inspections, SEBI found that none of the three platforms—Altgraaf, Tap Invest, or Stable Investments—were registered as required. Instead, these platforms reportedly circumvented regulatory norms by acquiring NCDs through private placements and later offering them to retail investors.

Ongoing Investigation and Potential Stricter Action

SEBI’s investigation into these platforms is ongoing, with additional allegations of fraudulent activities under review. The market regulator has signaled that more stringent actions could follow if further violations are identified, underscoring its commitment to enforcing regulatory standards in the unlisted bond market.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.