Look at privately placed NBFC paper while building a bond kitty
“Making a private placement for corporates is more cost-effective and fast”.
“Making a private placement for corporates is more cost-effective and fast”.
Rich investors looking to park money for near-term liquidity could consider investing in a mix of Treasury bills – short-term government securities and ultra short-term debt mutual funds.
There is a steady rise in inquiries by investors on investing directly in bonds as debt funds and MLDs (market-linked debentures) no longer have any capital gain advantage from April 1, 2023.
Distributors believe rich investors continue to eye tax-free products like the public provident fund (PPF) and Sukanya Samriddhi Account Scheme.
One should note that the NCD issue comes with a fair bit of credit risk as it is not rated AAA.
While the issue is not sovereign backed, it is implied that if there is any complication tomorrow, the Madhya Pradesh government will step in.
“For the time being, investors should remain invested in short-duration debt funds with maturities up to three years as the yields are very attractive”.
The interest rates are not that attractive as some banks are now offering some 8 percent on their fixed deposits.
Diversify across sectors and match your investment horizon with paper’s tenor to avoid liquidity issues
The expectation of the interest rate cycle peaking can be a good entry point into long-duration products including gilt funds.