With investors’ interest in Indian start-ups increasing in momentum, Grip, an alternative investment platform, is planning to expand its portfolio with the introduction of Securitised Debt Instruments (SDIs). In the first issuance of its type to be listed on the NSE, the alternative investment product will offer individual investors an opportunity to fractionally invest in innovative regulatory-compliant products across varied industries.
The first SDI instrument, which will be listed on National Stock Exchange (NSE) on October 10, will have a tenure of 36 months and provide an interest rate of 18 percent. Investors will be able to earn returns through 36 fixed monthly payouts.
So, how will it benefit investors?
According to Nikhil Aggarwal, Founder & CEO at Grip, retail investors are dealing with a unique investment climate on account of three reasons:
Inflation continues to persist above the fixed deposits rate resulting in negative real returns. With 60-70 percent of users' portfolios being in such instruments, investors are dealing with a wealth reduction
Stock markets have been incredibly volatile, with the volatility index at one of its highest levels since the first COVID-19 lockdown
More and more companies are raising capital from private markets rather than public markets, reducing the availability of high-quality investment opportunitiesThese were similar messages even in SEBI’s recent discussion paper, and these are the reasons why retail investors are increasingly seeking to diversify their portfolios with higher-yielding non-stock market-linked instruments.
Unfortunately, Aggarwal said, there are very few Sebi-regulated investment options that meet these criteria and, at the same time, are accessible by a retail investor. Most products require either a very high investment amount or require investors to have a very high net worth to be eligible.
This SDI or Securitised Debt Instrument will give access to an instrument which is:
Issued in compliance with SEBI regulatory framework
Listed on the stock exchange
Rated by a SEBI-registered rating agency
Offers inflation-beating returns
Available at smaller ticket sizes with no minimum net worth requirementsSecuritization transactions are not new, but they have always been offered as investment options to banks, NBFCs or large institutions. With this offering, they are being made available to retail investors as well.
How will SDI empower investors to diversify their portfolios?
With this, investors will have a regulated product that will offer them a very different risk-reward than fixed deposits or the stock market.
"While having a different risk-reward, it will continue to provide all the ease of making a normal stock investment. It will be held in the investor's demat account. There will be no networth requirement to invest, and it is listed and can be traded on the stock exchange," Aggarwal told CNBC-TV18.com.
And, what will be the diversified companies/ industries?
For the current SDI issuance, the issuer has securitised monthly lease rentals from lessees in four different sunrise industries - one of the lessees is amongst the largest players in the two-wheeler EV space, another lessee is building EV infrastructure in the form of a battery-swapping network. One of them is India’s largest furniture rental company, which is leveraging the shift to the subscription economy, and the last lessee operates cloud kitchen infrastructure, Aggarwal said.
Each company is backed by well-known VC or PE firms. The SDI issuance has even been rated by CRISIL and is the first ever SDI to be listed on the NSE.
