Looking for regular returns on your investments with the objective of safety of
your capital – Fixed Income securities are the answer.
Whether you need to invest for a month, a year or 10 years, with issuers ranging
from the Government of India to Public Sector Units, to Corporates and NBFC’s
and varying yields as per your risk appetite, there are a plethora of options to
Sound portfolio planning calls for a definite allocation to fixed income assets for a variety of reasons
- It can help you tide over volatile times with positive cash flows at regular interval
- Your investments can be done in conjunction with cash flow needs of other asset classes like real estate EMI’s, mutual funds SIP’s, etc.
- The right allocation to fixed income securities can help you make positive returns net of inflation - subject to risk taking ability
- The predetermined cash flow patterns can be used to cover your expense requirements in time
- Innovative investment strategies using fixed income products can generate better returns than competing products in similar maturities
Our Business Model
Products & Services we offer
We regularly offer investment opportunities in the full bouquet of fixed income products Tax Free bonds, AT1 Bonds, MLD's,
Corporate bonds, PSU bond’s, GSec / SDL, State Guaranteed bonds, Commercial Paper / Fixed Deposits and others.
We are also a buyer in Fixed Income securities when you need to sell your holdings.
We also offer investment options for short durations which fetch better returns than conventional options in the market.
With the objective of generating the best post tax returns, we offer tax efficient securities.
You can also reach out to us for your investments in public issuances of corporate and PSU companies.
We also facilitate investments in Special Category investments like 54 EC bonds, RBI bonds, Sovereign Gold bonds etc.
If you are looking to raise funds through Fixed Income securities, we can assist with placement with our clients.
▪ Top Private Wealth firms in India
▪ Banks – Private and MNC
▪ Registered Investment Advisors
▪ MF Distributors
▪ Wealth Advisors
When you buy a bond, you are lending to the issuer, which may be a government, public sector enterprise, bank or corporate. Bonds are issued to raise money to fund expansion programs or build infrastructure. In return, the issuer promises to pay you a specified rate of interest during the life of the bond and to repay the principal, also known as face value or par value of the bond, when it "matures," or comes due after a set period of time.
Source: Goetzmann, William (2016). Money Changes Everything: How Finance Made Civilization Possible. Princeton University Press
- Government Securities (G-Secs)
- Treasury Bills (T-Bills)
- State Development Loans (SDLs)
- RBI Floating Rate Bonds
- Sovereign Gold Bonds
- Tax-Free PSU Bonds
- PSU Taxable Bonds
- Corporate Taxable Bonds
- Perpetual (AT1) Bonds
- State Govt. Guaranteed Bonds
- Market-Linked Debentures
Bonds typically have a stated maturity date, when the principal is expected to be repaid. As a result, bonds are designed to protect principal, which can be useful when trying to save for future expenses such as planning for retirement or other intermediate goals.
While many investments provide some form of income, bonds tend to offer the highest and most stable cashflows. Even at times when rates are low, there are still plenty of options you can use to build a portfolio that meets your income needs, for example investing in high-yield bonds or bonds with low but investment-grade credit rating.
Most importantly, a strong bond portfolio can provide decent yields with a lower level of volatility than equities. They also can make more income than debt mutual funds or fixed deposits. This all means that bonds are a good option for those who need to live off of their investment income.
The need of the hour is to hold a mix of different asset classes in the one’s portfolio. For example, adding bonds to an equity portfolio helps to achieve greater diversification. This ensures that the overall portfolio risk is reduced while potentially increasing returns over time. Since even if one asset class declines in value, there is still an opportunity for an increase in one or more of the other classes.
Certain types of bonds can be useful for those who need to reduce their taxable income. The income/dividends on fixed deposits, debt funds and equities is taxable, but interest on Tax-free PSU bonds is tax-free in the hands of the customer. Similarly, market-linked debentures (G-Sec linked) offer investors a predictable income in the form of capital gains with minimum holding period of 1 – 1.5 year.
Bond prices tend to appreciate when the issuer’s cost of capital falls or a positive re-rating takes place. Similarly prices of Government Securities also see an uptick during periods of falling interest rates and inflation.
Certain Government Securities add the ongoing inflation rate to their payments, which protects against the rising prices of goods and services in the economy.
Govt. of India issued Inflation Indexed bonds (IIBs) called Capital Indexed Bonds (CIBs) during 1997. These bonds provided inflation protection only to the principal and not interest payments. In June 2013, Govt. of India launched Inflation Indexed Bonds (IIBs) where inflation protection was provided to both the principal and interest payments. The wholesale price index (WPI) was used for inflation protection. These bonds were repurchased by the Govt. in March 2016.
1. Maturity: 1. Maturity: Is the date on which the bond issuer returns the principal and any accrued interest back to the investors. Maturities can be short (0 – 3 years), medium (3 – 7 years) and long (7 years and more) depending on the requirements of the bond issuer. Many bonds are structured in such a way that an issuer or investor can change the maturity date. Two typical types of maturity or redemption features are:
▪ a. Call Option: Allows the issuer to redeem the bonds at the specified price and date before maturity. For e.g., Perpetual AT1 Bonds issued by Scheduled Commercial Banks in India (under the BASEL III norms) have a call option which is usually 5 years from the date of allotment of the bonds
▪ b. Put Option: Gives the investor the option to sell the bond to the issuer at a specified price and date prior to maturity. For e.g. certain long term bonds issued by large Corporates in India come with a put option which allows the investor an early redemption.
3. Price: Most, but not all, bonds that are issued in primary are traded in the secondary market, thereby providing an option for investors (existing & new) to trade in them. Therefore, price is a important parameter to determine at what level the bonds will be traded. There are 2 types of prices in the market: Bid & Ask. Bid price is the highest amount a buyer is willing to pay for a bond; Ask price is the lowest price a seller is willing to accept for a bond.
4. Coupon / Interest: Is the fixed rate of interest that the bond issuer commits to pay to investors at a pre-defined frequency. Interest rate can be fixed, floating or payable on maturity. The frequency can be defined by the issuer as payable monthly, quarterly, half-yearly or annually.
5. Yield: is the rate of return on a bond. While the coupon is fixed, the yield is variable and is a function of the bond’s price in the secondary market, interest payments received and other factors.
Yield can be expressed as current yield, yield to maturity (YTM) and yield to call (YTC).
Current yield is the annual return on the bond and is derived by dividing the bond’s interest payment by its price.
Yield to maturity (YTM) is the total return received by holding the bond until it matures and is typically quoted as an annual % rate. This figure is common across all bonds and enables you to compare bonds with different interest rates. YTM equals all the interest payments received from the bond from purchase date till maturity, plus any gain or loss (bought at discount or premium) of principal.
6. Duration: Is a measure of how a bond’s price may change as market interest rates change. Long maturity bonds are more sensitive to price fluctuations when interest rates change compared to short and medium term bonds.
7. Credit Rating: is an evaluation of the credit risk of the issuer, predicting their ability to pay coupons and face value on time with an implicit forecast of the likelihood of the issuer defaulting.