Alternative Investment Updates – April 2024

The new financial year started with a fresh high for the Global and Indian markets but was soon followed by volatility. The same was seen in the crypto assets as Bitcoin reached an all-time high before giving up the gains.

This is one of the unique times we live in where almost all assets have scaled new heights, from Interest rates to gold to Equities and crypto.

There have been some positive developments in the Alternative investment world :

  • Reduced Minimum Size for private placement

In a significant overhaul of India’s bonds market, the SEBI, the capital market regulator, has approved a proposal to reduce the minimum investment amount for bonds to Rs 10,000 from the previous Rs 1 lakh.

This decision is expected to encourage greater involvement from retail investors in the Indian bond market. Previously, 99% of bonds had a minimum investment requirement of Rs 1 lakh, rendering this asset class inaccessible to many investors due to the high ticket size.

  • SM REIT guidelines introduced

The Securities and Exchange Board of India (SEBI) has introduced amendments to the REIT Regulations 2014, outlining guidelines for the establishment of Small and Medium Real Estate Investment Trusts, referred to as SM REITs.

This initiative aims to regulate the fractional ownership sector and protect the interests of investors by incorporating both commercial and residential properties under the new framework.

In this setup, SM REITs are permitted to raise funds starting from ₹50 crore by issuing units to a minimum of 200 investors. These funds will be utilized for the acquisition and management of real estate assets, thereby generating income for the investors.

The ownership structure of these assets will be organized through one or more schemes, each operating under special purpose vehicles (SPVs).

One shortcoming is that currently, it does not include residential real estate and land which is a more attractive proposition for investors.

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Alternative Investments Defaults and Delays

We have created a table to make it easy for everyone to track the latest status of ongoing delays and delays on various platforms and the current updates around them.

Name DealStatusUpdate
GrowpitalPlatform FreezeSEBI Freeze- SEBI require more information
- Webinar by Growpital
AltgraafArzoo Partial Repayment- - Litigation Process against Arzoo initiated
- New funding to be raised
TapinvestMelorra Asset LeasingEarly Asset Buyback- Melorra and Exampur Case filed
- Partial repayment for Exampur expected this month
GripinvestBigspoonPartial Repayment- Grip has filed case against company
- 25% asset recovery pending.
kredxDairy PowerRepayment- 93% principal repaid
KlubTagzDelay- Legal action pursued
- 3cr fundraise going on

Currently below are the key new updates on the various delays across Alternative Investment platforms.

  • Growpital SEBI Order Update
  • Tapinvest Melorra and Exampur Delay
  • Arzoo Altgraaf Default
  • Bigspoon Gripinvest Default

Growpital SEBI Outcome

SEBI had dismissed Growpital’s plea to unfreeze the accounts however their accounts are unfrozen now. Below is the summary of the SEBI order on Growpital prepared by an investor(Maulik)

Summary of SEBI Order

Growpital recently conducted a webinar to update investors on the current status. The summary of the webinar is below:

  • A loss of 100 crores has been indicated due to crops being left unattended as a result of SEBI’s interim order dated 29/01/2024.
  • Various issues arising from SEBI’s order dated 26/04/2024 have been addressed, mainly emphasizing that all requested details and information have been provided.
  • Expressing surprise at SEBI’s order dated 26/04/2024 rejecting the proposal for agribusiness in Assam/Nagaland and the utilization of 25.5 crores from bank accounts, with plans to challenge the order.
  • Founder Rituraj has assured that he has no intentions of absconding from the situation and will remain with his family.
  • Refusal to share any documents or proof requested by partners to allay apprehensions regarding the agribusiness, citing that these cannot be provided currently due to the matter being sub judice.
  • Regarding the return of investors’ funds, no assurances can be given at present, with the possibility of determining the amount and timeline only after SEBI issues the final order.

It seems SEBI is not very convinced with the information shared by Growpital and will need more time and data from them to come to any positive decision.

Tapinvest Exampur and Melorra Delay

Tapinvest has filed a complaint against both parties while parallel communication is also being done to resolve the issue amicably. Below is the latest communication shared by Tapinvest.

Exampur Delay
Exampur Delay

Tapinvest

Altgraaf Arzooo 

Recently Altgraaf conducted a webinar for the Arzooo delay. Below is a summary of the key points.

  • Arzooo sought capital from Altgraaf for the Diwali season in 2022, which proved to be successful for them.
  • Similarly, in 2023, Arzooo approached Altgraaf again for additional capital. However, they overestimated the demand, leading to an excess of inventory that they couldn’t sell. This marked the beginning of their decline, as they struggled to match up with lenders. HSBC, one of their major lenders, froze their debt due to overdue payments, resulting in Arzooo being unable to make any payouts, including employee salaries.
  • With no repayment timeline in sight, Altgraaf initiated legal action. TrustLaw, a law firm, deems Altgraaf’s case strong based on their documentation, recommending this course of action for now.
  • Concerns have been raised regarding Altgraaf’s due diligence on Arzooo, especially considering that other lenders, such as Capsave, two venture capitalists, and other NBFCs, approved Arzooo’s capital requirements for that season.
  • Currently, Arzooo is operating at reduced capacity, having had to let go of many employees, with some remaining unpaid since January.
  • Arzooo is actively seeking a rescue, such as a buyout or investment from an entity willing to acquire a significant equity stake, estimated at around $4 million.
  • Altgraaf believes that this $4 million buyout could serve as the primary solution for retrieving the principal.

Gripinvest Bigspoon Default

Grip has recovered around 75% of the principal from Bigspoon through asset sale and liquidation. They have proceeded with litigation against the founders as well as the kitchens that are holding the assets.

gripinvest

Alternative Investment Portfolio Updates

Altgraaf has recently segregated its invoice discounting products based on risk factors which makes it easy for investors to choose the one that fits their risk appetite. The various categories of products in the invoice discounting are :

altgraaf products

Please do note that very low risk does not mean zero risk.

Lending Investment

 

Some of the investments for this month include High Yield Bonds and Real Estate NCD

  • Stashfin -13% Altifi
  • Slice – 11.25% Altgraaf
  • Sri Parvata and Best Realty – 17.25% Altgraaf
  • YNOT Netflix -16.5% Betterinvest
Platform Returns RD NPA Total NPA
Grip Invest 10-12%(Post-Tax) 0.00% 0.30%
Klubworks 20%+ 0.15% 1.00%
WintWealth 10-11.5% 0.00% 0.00%
Jiraaf (altgraaf) 12-15% 0.00% 0.25%
Sustvest 10-11% 0.00% 0.00%
Afinue(Upcide) 13%(Post Tax) 0.00% 0.00%
Pyse 10-11%(Post-Tax) 0.00% 0.00%
Growpital SEBI Pause SEBI Pause N.A.
Leafround(Tapinvest) 15-18% 0.00% 0.00%
Altifi 12.5% 0.00% 0.00%
Betterinvest 16%-18% 0.00% 0.00%
Incred Money 11.0% 0% 0%
Randomdimes Youtube

Short Term Investments

Platform Returns RD NPA Investor NPA
Liquiloans (Stopped) 9% 0% 0%
Tradecred 11.50% 0% 0%
Lendbox Per Annum 11.50% 0% 0%
Lendzpartnerz 13.00% 0% 0%
Faircent 11% 0% 0%
KredX 12% 0% 0.75%
13  Karat (new) 13% 0% 0%

The RBI order on p2p lending platform to stop liquid funds model  has made all platforms stop the instant liquidity model

  • Currently Invested in 2 deals on Tapinvest – Boat and Attic
  • Invested in KFC on Lenderpartnerz
  • Invested in Amazon on Tradecred
  • Invested in Infosys on Kredx
  • Lendbox per annum performance has been as per expectation. I avoid high-yield investments on it.

Crypto Investing

Bitcoin halving is a once-every-four-year software update on the Bitcoin blockchain. The much-anticipated event slashes the reward for mining a new Bitcoin in half.

The first Bitcoin halving happened on November 28, 2012, the second on July 9, 2016, and the third on May 11, 2020. The latest installment of the event happened a couple of weeks back on April 19, 2024. Miners now get 3.125 BTC for mining 1 BTC.

Historically, halvings have been preceded by an increase in BTC’s price in the short term and succeeded by fluctuations and then a gradual price increase as reduced supply meets sustained or growing demand

Investors can either  Hardware Wallets on Etherbit or buy Bitcoin ETF on Stockal.

In other news – Tether, the stablecoin company has made 4.5 Billion USD in profit over the quarter and is approximately making 45 million USD per employee compared to 100k USD per employee profit for Goldman Sachs !!

Tether

P2P Investment

Current allocation:

  • India P2P – 50%
  • I2IFunding- 20%
  • Finzy-10%
  • Faircent Pool Loan -15%
  • 13 Karat – 5%
Platform Loans Selected Yield NPA
I2IFunding(Restarted) Urban Clap Loans, education loans, Group loans 13.7% 4.5%
IndiaP2P Only Women Borrower Loans, Branch-based p2p lending 16% 1.8%
FINZY(Paused) Prime Borrowers, High Salary, A category 13% 4%
12 Club (paused) Only Minimum amount 12% 0%
  • My Indiap2p performance has been fine. Some people faced issues in March due to delayed collection
  • Planning to do a detailed review on I2Ifunding (Referral code discount50@i2i) as I have been using this since 2017 and can share my personal experience.

Equity Market

PreIPO Stocks

Altius

We had recently highlighted that Vikram Solar has been in demand in the grey market. The price of Vikram Solar has jumped from 180-190 to 250 in a matter of 1 month. This is also due to its comparison to Waree Energy, the largest solar company in India that had stock price appreciation in the unlisted market.

Listed Stocks

hangseng etf

My investment in Hangseng seems to have started giving a decent payoff though it’s too early to predict and I am prepared to add more capital if the market falls from current levels.

After a weak start to the year, the Hang Seng index entered a technical bull market, touching a level 20 percent above its January low, with an influx from international funds

Indian market seems to be more volatile due to global factors and upcoming election results in May end.

Algo Trading

Alternative investment

April did not prove to be a great month as I couldn’t make any money in the market. The options market has become riskier due to sudden sharp intraday moves. Many people are attributing this to the recent news of Jane Street manipulating the Indian option market to profit from it. Nevertheless, profit and loss are part of this game.

jane street

Investors who are just starting algo trading can explore tradetron as it requires a minimum learning curve and marketplace to copy traders.

Investors with INR 30+ Lakh deployable capital can reach out to inquire on more sophisticated algos

Other Alternative Investment Assets  and Platform Updates

ALTDRX – I was able to liquidate a part of my existing investment on Altdrx with 10%+ profit over the last 3 months. I am waiting for the valuation report on the Hyderabad property. Will be investing in this property also with a time horizon of 1-2 years as Hyderabad seems to be a more attractive market.

Earnnest.me-  The platforms seem promising and there has been a good demand for Pune property. Investors can use the below code while investing to get 0.5% extra on their investments.

Use Code PX64XW to get 0.5%

Flagged Alternative Investment Platforms

citydhan

Have added “citydhancapital.com” to the list of  Flagged”  platforms. The platform boasts of providing assured 2% returns.

The team has stock images from the internet. There are no business model details provided. It is best to avoid such platforms.

If there are other platforms that you feel might be too risky to invest in, please do comment and we will explore and add them to the list

 

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All About Bitcoin ETFs: A Beginner’s Guide to Bitcoin ETF in India

In recent years, the world of finance has been buzzing with excitement over the emergence of cryptocurrencies, with Bitcoin leading the charge. Among cryptos, Bitcoin & Ethereum have gained widespread attention as potential investment assets. However, navigating the world of cryptocurrencies can be daunting for many investors, especially in countries like India where there is … Read more

Alternative Investment Portfolio – March 24

March has been a volatile month for Equity and Crypto markets as both these assets are hovering around their all-time high levels and waiting for the next trigger to pick up a direction.

On the Alternative Investment front, there has been an increase in the overall yield of invoice discounting due to the current year-end demand. In the P2P segment, after the RBI intervention platforms have stopped the instant liquidity plan and replaced it with short-term products.

There has been a positive change with SEBI focussing on REITs and soon there could be guidelines governing fractional real estate platforms in the future.

Telegram channel for the Latest Alternative Investment News

Alternative Investments Defaults and Delays

We have created a table to make it easy for everyone to track the latest status of ongoing delays and delays on various platforms and the current updates around them.

Name DealStatusUpdate
GrowpitalPlatform FreezeSEBI Freeze- SEBI require more information
- Webinar by Growpital
AltgraafArzoo Partial Repayment- - Litigation Process against Arzoo initiated
- New funding to be raised
TapinvestMelorra Asset LeasingEarly Asset Buyback- Melorra and Exampur Case filed
- Partial repayment for Exampur expected this month
GripinvestBigspoonPartial Repayment- Grip has filed case against company
- 25% asset recovery pending.
kredxDairy PowerRepayment- 93% principal repaid
KlubTagzDelay- Legal action pursued
- 3cr fundraise going on

Currently below are the key new updates on the various delays across Alternative Investment platforms.

  • Growpital SEBI Order
  • Tapinvest Melorra Buyback
  • Kredx Invoice Default

Growpital SEBI Order

Below are the latest updates on the Growpital Freeze. They had initially put a petition in the Rajasthan High Court that was rejected, thus they have moved SAT to put a stay on the SEBI order.

  • SEBI Hearing:

 SEBI has provided them with a hearing scheduled for 12th April 2024. This represents a significant step in the ongoing SEBI Ordeal.

  •  SAT Hearing

Securities Appellate Tribunal (SAT) has given them 8th April for the hearing. Below are the details of the Quorum

  • Justice (Retd.) Shri P.S. Dinesh Kumar* (Former Chief Justice, High Court of Karnataka) appointed as Presiding Officer, SAT
  • Shri Dheeraj Bhatnagar*, Retd. Principal Chief Commissioner of Income Tax, Delhi appointed as Technical Member, SAT

Tapinvest Melorra Buyback

Tapinvest Melorra had taken laptops on asset leasing through Tapinvest. It seems due to a recent restructuring the company wanted to exit the leasing. They sent back the laptop to Tapinvest without any discussion. After much discussion with Tapinvest, they have bought back some of the laptops at the correct price to honor the IRR.

Tapinvest is in talks with Melorra to process buyback for all the laptops after the fundraiser. There can be various scenario

  • Melorra buyback, but not at the correct IRR
  • Melorra refuses to buyback all laptops.

In both cases, Tapinvest will try to ensure that investors get the promised IRR. The team said they are confident that investors will not lose in the deal and expect a resolution soon.

Seems the more prudent decision is to allow buyback and then evaluate the IRR impact if any.

Kredx Dairy Power 

The dairy power invoice had been delayed for a long time. Kredx was able to recover around 70 % in the first tranche and 23% in the second tranche out of the total 100%. Kredx had a few instances of default in the past but they have also been more aggressive than a few platforms in recovering the money.

However, it is important to keep exposure on invoices low to avoid getting stuck with large capital

 

Alternative Investment Portfolio Updates

earnnest

This month I added a couple of platforms namely:

While Earnnest is a platform that focuses on high-yield Real Estate NCD, Golden Pi is a debt marketplace that has options from low to high yield.

Earnnest has a strong team and investors who want to have exposure to Real Estate NCD can explore this option. I think it is super important to have a highly experienced team in these products as it requires a granular level of intricacy in deal structuring and drafting legal documents with strong recourse apart from knowing the property and collateral.

Earnnest Code PX64XW to get 0.5%

Lending Investment

 

Some of the investments for this month include High Yield Bonds and Real Estate NCD

  • Madhura Developers -17.45% Altgraaf
  • Zuari  -13.07% Altgraaf
  • Lendingkart -12.71% Goldenpi
  • Muthoot Mini – 10.7% Altifi
  • Rusk Media -16.5% Betterinvest

I generally prefer bonds with a yield of 12% and above as post-tax returns should be close to 8.5%+ minimum else we are better off investing in an arbitrage fund at a lower tax rate.

 

Platform Returns RD NPA Total NPA
Grip Invest 10-12%(Post-Tax) 0.00% 0.30%
Klubworks 20%+ 0.15% 1.00%
WintWealth 10-11.5% 0.00% 0.00%
Jiraaf (altgraaf) 12-15% 0.00% 0.25%
Sustvest 10-11% 0.00% 0.00%
Afinue(Upcide) 13%(Post Tax) 0.00% 0.00%
Pyse 10-11%(Post-Tax) 0.00% 0.00%
Growpital SEBI Pause SEBI Pause N.A.
Leafround(Tapinvest) 15-18% 0.00% 0.00%
Altifi 12.5% 0.00% 0.00%
Betterinvest 16%-18% 0.00% 0.00%
Incred Money 11.0% 0% 0%
Randomdimes Youtube

Short Term Investments

Platform Returns RD NPA Investor NPA
Liquiloans (Stopped) 9% 0% 0%
Tradecred 11.50% 0% 0%
Lendbox Per Annum 11.50% 0% 0%
Lendzpartnerz 13.00% 0% 0%
Faircent 11% 0% 0%
KredX 12% 0% 0.75%
13  Karat (new) 13% 0% 0%

The RBI order on p2p lending platform to stop liquid funds model  has made all platforms stop the instant liquidity model

  • Lendbox Per Annum returns are as per expectations. I am not investing in other p2p products on Lendbox. I will explore the bonds they plan to list soon.
  • Have completely closed liquiloans as the current yield does not make any sense to invest.
  • Invested in Amazon on Wonderchef on Kredx. Have also invested in a few invoices on Tradecred, Lendpartnerz, and Tapinvest too as yields are good.

There have been a few delays on Tradecred due to year-end volume. They have updated that the backlog will be cleared by 15-20th April.

Crypto Investing

There has been a lot of interest in Bitcoin and crypto after the bitcoin spot ETF approval. In India due to the TDS rule of 1% lot of people lack interest in crypto exchanges. Another reason is the risk of hacking or exchange going down. There are 2 options for such investors

Investors can buy Bitcoin ETF on Stockal. We will be doing a detailed post on the same soon. It is one of the best way to have an allocation to Bitcoin.

P2P Investment

Current allocation:

  • India P2P – 50%
  • I2IFunding- 20%
  • Finzy-10%
  • Faircent Pool Loan -15%
  • 13 Karat – 5%
Platform Loans Selected Yield NPA
I2IFunding(Restarted) Urban Clap Loans, education loans, Group loans 13.5% 4.7%
IndiaP2P Only Women Borrower Loans, Branch-based p2p lending 16% 1.7%
FINZY(Paused) Prime Borrowers, High Salary, A category 13% 3.7%
12 Club (paused) Only Minimum amount 12% 0%
  • I Have completely stopped 12Club now as the yields are not attractive anymore.
  • There have been some delays in the last month’s repayment for Indiap2p. As per management the collection delay was due to operational issues due to floods and collections will improve next few months.
  • I2Ifunding (get 50% off) has been a low-profile platform but surprisingly has consistently delivered decent returns for me.

Equity Market

PreIPO Stocks

NSE is currently trading at 4200-4500 in the private market and investors who had bought it below 3500  have made decent gains considering that the stock provides a decent dividend yield also. Serum Institute of India Pvt., National Stock Exchange of India Ltd., and Megha Engineering and Infrastructures Ltd. are the most valuable companies in the unlisted space.

Listed Stocks

Alternative investment

Currently, the market is in overbought space but the moment looks pretty strong and I expect the rally to sustain. I am not too keen on index investing right now as the upside can be only 10-15% from current levels. At this level, I’m investing in 2 categories.

  • Individual stocks with momentum (mostly midcap and small-cap)
  • Beaten down global markets like China (Doing SIP  as i expect the bearishness to persist). Stocks in China and Hong Kong sold off a massive $4.8 trillion in market capitalization since 2021, which according to HSBC, is more than the value of the Indian stock market.

Algo Trading

I have recently started momentum and mean reversion strategies along with Market Neutral to create a more diversified basket. March has been a decent month

Investors who are just starting algo trading can explore tradetron as it requires a minimum learning curve and marketplace to copy traders.

Investors with INR 30+ Lakh deployable capital can reach out to inquire on more sophisticated algos

Other Alternative Investment Assets  and Platform Updates

ALTDRX – My current investment in ALT DRX has been deployed in prime land assets. The investment has already gained approximately 15% in the last 3 months. I tried liquidating a few units on the exchange. The actual price would be realized when I can liquidate the entire position. I will be liquidating a few units every month and also participating in the next project.  The team behind the project is quite strong. The next opportunity is in Hyderabad.

The real alpha is being generated by investing at the Private opportunity level as can be seen in my investment. The PO opportunity had gone up 20% compared to the FSO which is up around 10%

Wisex- My investment in Wisex has been performing as expected. The Sky opportunity in Pune is still live on the platform.

Flagged Alternative Investment Platforms

Have added “Talkcharge” to the list of  Flagged”  platforms. Talkcharge App has induced thousands of people to fill their wallets with various schemes of cashbacks etc All of a sudden operations halted, the office closed, & no recharge/bill payments were allowed in the app. Recently RBI has asked them to halt all operations.

Investors should be wary of too-good-to-be-true opportunities offering very high returns without providing details of the business model or the risk being taken to provide those returns.

If there are other platforms that you feel might be too risky to invest in, please do comment and we will explore and add them to the list

 

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High Yield Bonds in India – Best Platforms

In the Indian financial landscape, high-yield bonds play a significant role in offering investors the potential for enhanced returns. These bonds, carry higher risk but also promise higher yields. In this guide, we will explore the nuances of high-yield bonds in the Indian context, focusing on BBB bonds, real estate bonds, and venture debt, which are gaining traction among investors seeking alternative avenues for portfolio diversification and higher income.

Understanding High-Yield Bonds in India

High-yield bonds in India are debt instruments issued by companies or governments with credit ratings below investment grade. This typically includes bonds rated below BBB by credit rating agencies such as CRISIL, ICRA, or CARE. These bonds offer higher yields to compensate investors for the increased credit risk associated with the issuing entities.

Characteristics of High-Yield Bonds in India:

  1. BBB Bonds: BBB bonds represent a significant segment of high-yield bonds in India. These bonds are issued by companies with lower credit ratings, implying a higher default risk compared to investment-grade bonds. Despite the slightly higher risk, BBB bonds offer attractive yields, making them popular among income-seeking investors. The expected Yield from BBB is 12-13.5%
  2. Real Estate Bonds: Real estate bonds are debt securities issued by real estate developers to raise capital for property development projects. These bonds typically offer higher yields than traditional corporate bonds, reflecting the inherent risks associated with the real estate sector, including market cyclicality, regulatory changes, and project-specific risks. Expected Yield from Real Estate Bonds is 15-18%
  3. Venture Debt: Venture debt is a form of financing provided to early-stage or growth-stage startups, often in conjunction with equity financing. Venture debt offers higher yields compared to traditional corporate bonds, compensating investors for the higher risk associated with startups. Venture debt providers may include specialized funds, HNI,banks, or non-banking financial companies (NBFCs) with expertise in evaluating startup business models and risk factors. Expected Yield from Venture Debt is 15-20%

Benefits of High-Yield Bonds in India

  1. Enhanced Yield: High-yield bonds offer investors the potential for higher income compared to investment-grade bonds, making them attractive.
  2. Portfolio Diversification: Including high-yield bonds in a diversified investment portfolio can help enhance overall portfolio returns and reduce correlation with other asset classes such as stocks and traditional bonds.
  3. Exposure to Alternative Sectors: Real estate bonds and venture debt provide investors with exposure to alternative sectors such as real estate and startups, offering diversification benefits and potential for capital appreciation.
  4. Counter-Cyclical Characteristics: High-yield bonds in India have historically exhibited counter-cyclical characteristics, performing well during economic recoveries and outperforming other fixed-income assets during periods of economic expansion.

Risks of High-Yield Bonds in India

  1. Default Risk: High-yield bonds are susceptible to default risk, particularly BBB bonds issued by companies with weaker credit profiles. Investors should carefully assess the creditworthiness of issuers and conduct thorough due diligence to mitigate default risk.
  2. Sector-Specific Risks: Real estate bonds and venture debt are exposed to sector-specific risks, including market cyclicality, regulatory changes, and project-specific factors. Investors should consider the unique risks associated with these sectors before investing.
  3. Liquidity Risk: High-yield bonds in India may have lower liquidity compared to investment-grade bonds, making it challenging to buy or sell them at desired prices, particularly during market downturns or periods of heightened volatility.

Strategies for Investing in High-Yield Bonds in India

  1. Active Management: Active management strategies involve conducting fundamental analysis, credit research, and issuer-specific due diligence to identify attractive high-yield opportunities and manage default risk effectively.
  2. Diversification: Diversifying across a broad range of high-yield bonds, including BBB bonds, real estate bonds, and venture debt, can help mitigate individual issuer risk and enhance portfolio stability.
  3. Duration Management: Managing portfolio duration and interest rate sensitivity can help investors navigate interest rate risk by adjusting the average maturity of high-yield bonds to align with market conditions and investment objectives.
  4. Credit Quality Assessment: Conducting thorough credit analysis and due diligence on high-yield issuers is essential for assessing default risk and selecting bonds with attractive risk-adjusted returns.
  5. Sector Allocation: Allocating investments across various sectors, including real estate and startups, can help spread risk and capitalize on sector-specific opportunities while avoiding concentration in high-risk sectors.

Does High Yield Mean More Risk Too?

Having seen the different types of bonds, investors are often faced with the dilemma of risk if they chase high yield bonds. Its very understandable that the potential of higher return for
high-yield assets is accompanied by the chances of greater default risk than the corporate and government debt securities. However, that’s not the case to be understood in a universal sense. For instance, corporate bonds are provided with the rating of AAA to default by credit rating agencies. Here, AAA is considered as the highest rating. Companies tend to invest in AAA-rated bonds due to the regulatory and internal mandates that come with them. Hence, such bonds tend to have higher demand which results in lower yield. AAA-rated bonds come with a very high degree of creditworthiness. This is because the issuers succeed in meeting the financial commitments easily along with a lower risk of default. On the other hand, bonds that come with a slightly lower rating offer high yields due to lower demands. Further, these have a lower risk factor.

This goes without saying that investors prefer to invest in high-rated instruments. Further, regulators do not allow investments into instruments with a below A rating. Hence, the demand for such instruments drops automatically despite the low-risk factor.

Best Platform to Buy High Yield Bonds In India

Below is the list of some of the platforms that we use to buy Yield Bonds

Altifi

Altifi is part of Northern Arc Group and has some of the top High Yield Bonds. The platform boasts of zero default to date. They list only those bonds that have been reviewed by their team. Their experience in credit writing gives more credibility to the bonds available in the platform. Microfinance companies is the forte of this platform

Gripinvest

Grip Invest offers multiple High Yield Bonds that are popular in the market. They also provided Securitized debt instruments that can provide a yield as high as 16% to the investors. Read about Securitized debt instruments here

Altgraaf

Altgraaf is a platform that specializes in Alternative Investments. Apart from other products it also lists Real Estate NCDs and Venture debt that can offer upto 18% IRR to investors.

Wint wealth

Wint Wealth is a bond-only platform. They list a couple of bonds every month.  Unlike other platforms, they work with the issuer and create customized payment schedules for the bonds. The focus is on due diligence and optimum repayment structure to reduce risk

Tapinvest

Tapinvest provides access to unlisted bonds. These are bonds of generally Fintech companies or Startups and have yields ranging from 13-17%.

Incred Money

incred

The platform is backed by Incred Group. Apart from listing high-yield bonds, the platform also lists unique products like Market Linked Debentures that are linked to Nifty Performance and can also provide principal protection.

Conclusion

High-yield bonds, including BBB bonds, real estate bonds, and venture debt, offer investors the potential for enhanced returns in the Indian market. By understanding the characteristics, benefits, and risks of high-yield bonds and employing sound investment strategies, investors can effectively harness the potential of these alternative fixed-income instruments to enhance portfolio returns while managing risk. However, it’s crucial to conduct thorough due diligence before investing in high-yield bonds or any other asset class, considering individual investment objectives, risk tolerance, and time horizon.

If you wish to explore alternative investments beyond high yield bonds go through the below list

Alternative Investment List

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Best Long Duration Funds In India for 2024

The world of fixed-income investing can be complex, with various types of debt instruments offering diverse risk-reward profiles. One category garnering significant attention lately is duration funds. These funds hold specific debt securities with varying maturities, and their performance is intrinsically linked to interest rate movements. This article delves into the intricacies of duration funds, … Read more

Best Peer to Peer (P2P) Lending Platforms in India for 2024

Peer-to-peer (P2P) lending has emerged as a revolutionary financial model, disrupting traditional banking systems and providing a platform for individuals and small businesses to borrow and lend money directly. In India, P2P lending has gained significant traction as an alternative investment avenue. This guide aims to provide an in-depth understanding of P2P lending, covering its … Read more

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