How to Buy corporate bonds in India?
This query is : Resolved
14 August 2021
Can anyone tell me, how to buy corporate bonds in India?
14 August 2021
I got this answer of me from another source.
Speaking of compounding interest and time, bond has a marketplace of its own since a very long time. And technology has only fed in to the interest in a vast majority of people, over a period of time, along with the inflow of social media and digital marketing. Bond investment was only for a handful of investors such as corporates, banks, and HNIs. It has become more prevalent in the past few years, and most investors prefer diversity in their portfolio.
Opt [BondsIndia.com] for investing in Bonds (debenture), Fixed Investment, Fixed Deposits & Safe Investment - Important
A bond is a debt agreement that an entity gets in with the investor with a promise to pay fixed interest at a fixed period of time and then the principal amount is repaid at maturity. They are fixed income instruments issued by companies or government which are tradeable assets.
Corporate Bonds
Every time you need a loan, you go to a bank or simply download an app-based platform to apply for loans. The finance company issuing the loan to you, then, goes through your application, checks your credit score, and issues a statement saying whether or not they will be in a position to lend you money.
Nowadays, the app-based platforms set up their own ratings to open gates for more and more people. For example, the statement issued by the lender might say they cannot fulfil your request for XX amount of loan, but you can start with a lower amount and then gradually move up to the bigger amounts with timely payments. Thus, the lender can opt out or apply.
Corporate bonds work in somewhat similar fashion When a company needs funds for expansions, acquisitions, or operational purposes, they roll out bonds for investors. From the investor's point of view, they are lending companies money, relying on an independent opinion provided by credit agencies on a company’s ability to meet payment obligations in the past a well as the future. Investors do not have ownership rights in the company as in equity. The interest rates and tenure are pre-determined. Hence, the room for loss is minified.
A Bond is issued in the primary market by a company, then traded in the secondary market among investors. In the secondary market, the bond’s value and yield is ascertained by factors such as demand and supply, current interest rates, liquidity, etc.
Purchase price of a bond is determined by the yield of the bond. Yield is the total return anticipated on until it reaches maturity. The diagram below will flash more light on the yield performance during the life of the bond. If the price of the bond falls, the yield increases, when the price of the bond rises, the yield is less.
How to invest in Corporate bonds?
A Bond instrument ensures a regular source of income for its investor. Before investing in corporate bonds, make sure you have done a thorough research about the company and its financial standings and the risk involved in setting your money for long-term and short period of time.
To invest in corporate bonds, the investor needs a demat account, where the bonds are deposited after purchase. It is a way of cutting down paperwork and holds your bond in electronic format. Once you have that straightened up, make a decision about your investment horizon, risk appetite, and the amount you are willing to allocate.
In a primary market, bonds are issued directly by the companies. An investor will have to fill in an application form and submit it to the issuer with the payment. In the secondary bond market, bonds that are bought in the primary market are traded among investors.
Visit [BondsIndia] bond section and go through the various bond options available, along with their credit ratings and minimum investment required. It is India’s first blockchain-based platform for fixed-income securities. Choose the bond that meets your investment goals and go for it. Once you have made the purchase on our platform, the security will then be issued to you in the Demat account.
In case you don’t have a demat account, you can open one. If you do not wish to open a demat account, the bond will be issued to you in a physical form.
How to sell corporate bonds in India?
The bonds are meant to be held till maturity, however, if you wish to sell it before maturity, you can trade them in the secondary market. The selling price of the bond may vary depending on a lot of factors like interest rate , demand at the time. On the exchange, you will have to sift through different types of investors to find retail investors. Even when you find one, you will need to settle on a price, which takes a lot of back and forth and negotiations.
There are other online settlement platforms where the brokers buy bonds from you. They are safer channels for selling your bonds, as the counterparty risk is close to none. Furthermore, the buyer has to settle the payment only then the bonds will be issued else, they will be credited back in to your account.
Services such as [BondsIndia.com] ensure your bond is purchased at a competitive price and settlement is done in a secured manner. [BondsIndia.com] is a block-chain, and technology-driven platform for selling and purchasing bonds and other fixed income securities. [BondsIndia.com] is not only a digital trading platform but also a knowledge sharing platform.
Speaking of compounding interest and time, bond has a marketplace of its own since a very long time. And technology has only fed in to the interest in a vast majority of people, over a period of time, along with the inflow of social media and digital marketing. Bond investment was only for a handful of investors such as corporates, banks, and HNIs. It has become more prevalent in the past few years, and most investors prefer diversity in their portfolio.
Opt [BondsIndia.com] for investing in Bonds (debenture), Fixed Investment, Fixed Deposits & Safe Investment - Important
A bond is a debt agreement that an entity gets in with the investor with a promise to pay fixed interest at a fixed period of time and then the principal amount is repaid at maturity. They are fixed income instruments issued by companies or government which are tradeable assets.
Corporate Bonds
Every time you need a loan, you go to a bank or simply download an app-based platform to apply for loans. The finance company issuing the loan to you, then, goes through your application, checks your credit score, and issues a statement saying whether or not they will be in a position to lend you money.
Nowadays, the app-based platforms set up their own ratings to open gates for more and more people. For example, the statement issued by the lender might say they cannot fulfil your request for XX amount of loan, but you can start with a lower amount and then gradually move up to the bigger amounts with timely payments. Thus, the lender can opt out or apply.
Corporate bonds work in somewhat similar fashion When a company needs funds for expansions, acquisitions, or operational purposes, they roll out bonds for investors. From the investor's point of view, they are lending companies money, relying on an independent opinion provided by credit agencies on a company’s ability to meet payment obligations in the past a well as the future. Investors do not have ownership rights in the company as in equity. The interest rates and tenure are pre-determined. Hence, the room for loss is minified.
A Bond is issued in the primary market by a company, then traded in the secondary market among investors. In the secondary market, the bond’s value and yield is ascertained by factors such as demand and supply, current interest rates, liquidity, etc.
Purchase price of a bond is determined by the yield of the bond. Yield is the total return anticipated on until it reaches maturity. The diagram below will flash more light on the yield performance during the life of the bond. If the price of the bond falls, the yield increases, when the price of the bond rises, the yield is less.
How to invest in Corporate bonds?
A Bond instrument ensures a regular source of income for its investor. Before investing in corporate bonds, make sure you have done a thorough research about the company and its financial standings and the risk involved in setting your money for long-term and short period of time.
To invest in corporate bonds, the investor needs a demat account, where the bonds are deposited after purchase. It is a way of cutting down paperwork and holds your bond in electronic format. Once you have that straightened up, make a decision about your investment horizon, risk appetite, and the amount you are willing to allocate.
In a primary market, bonds are issued directly by the companies. An investor will have to fill in an application form and submit it to the issuer with the payment. In the secondary bond market, bonds that are bought in the primary market are traded among investors.
Visit [BondsIndia] bond section and go through the various bond options available, along with their credit ratings and minimum investment required. It is India’s first blockchain-based platform for fixed-income securities. Choose the bond that meets your investment goals and go for it. Once you have made the purchase on our platform, the security will then be issued to you in the Demat account.
In case you don’t have a demat account, you can open one. If you do not wish to open a demat account, the bond will be issued to you in a physical form.
How to sell corporate bonds in India?
The bonds are meant to be held till maturity, however, if you wish to sell it before maturity, you can trade them in the secondary market. The selling price of the bond may vary depending on a lot of factors like interest rate , demand at the time. On the exchange, you will have to sift through different types of investors to find retail investors. Even when you find one, you will need to settle on a price, which takes a lot of back and forth and negotiations.
There are other online settlement platforms where the brokers buy bonds from you. They are safer channels for selling your bonds, as the counterparty risk is close to none. Furthermore, the buyer has to settle the payment only then the bonds will be issued else, they will be credited back in to your account.
Services such as [BondsIndia.com] ensure your bond is purchased at a competitive price and settlement is done in a secured manner. [BondsIndia.com] is a block-chain, and technology-driven platform for selling and purchasing bonds and other fixed income securities. [BondsIndia.com] is not only a digital trading platform but also a knowledge sharing platform.
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