New Delhi, Sept. 28 -- A salaried saver in Pune scrolls through a bond app. His fixed deposit renews at 6.9%. On screen is a debenture from a finance company he has never heard of: 13.5%, rated BBB, minimum Rs.10,000. The rating sounds respectable enough. He buys.

He has staked his savings on one company surviving three years. He cannot read its loan book or judge whether it can refinance its own borrowings. If the company stops paying, he joins the queue behind the banks.

His position is not unusual. Across 208 bonds on five of the larger platforms, only 3% is AAA-rated and nearly 66% is A+ or below. And note the entry price: 68% of BBB bonds can be bought for Rs.10,000 or less, against 17% of AAA. The weaker the borrower, the smaller ...