IBLA exclusive: Perpetual bond closer to equity than debt, carries higher risk says Uday Kotak

He further said, "Perpetual bonds must be appropriately risk-priced if they are treated as debt," adding that the risks for perpetual bonds are significantly higher than the markets may have priced in.

Perpetual bonds have been in focus ever since early 2020 when Yes Bank wrote off perpetual bonds worth a staggering Rs. 8415 core, causing losses to investors who had poured their money into mutual funds which had invested in these bonds. Last week, SEBI introduced fresh rules for perpetual bonds, limiting mutual fund exposure and mandating maturity at 100 years. However, days later, the finance ministry has written to the market regulator, asking for the 100-year maturity rule to be revoked.