Can companies buy SGB from the secondary market?

Bonds
1

For the gold portion of our investment, I prefer SGB over other options.

As far as I know, a private limited company cannot buy SGB from RBI during the initial issue from a corporate demat account.

But I often see SGB trading in the secondary market, from where it seems possible to buy them from a corporate demat account.

The RBI circular point 4 says

Persons resident in India as defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities and charitable institutions. Individual investors with subsequent change in residential status from resident to non-resident may continue to hold SGB till early redemption/maturity.

In the same circular, they allow trading but don’t mention similar limitations on who can buy from the secondary market.

Does anyone know if it’s legitimate for companies to buy SGB in the secondary market, or a glitch/loophole in the current system?

1 Like
2

This was answered here ^

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3

Thanks @Pai :pray:

By the same definition, can companies buy from the primary market as well? As in, subscribe to the fresh/upcoming SGB issue?

4

No. Corporates can only purchase in secondary market as of now.

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5

Thanks for clarity.

Do companies also have 4KG or some other limit? Or can we buy for any quantity?