The lack of regulation in the rupee bonds hinder retail investors from entering the sector. The country’s fintech start-ups and arrangers launched bond portals offering rupee bonds specifically to retail investors. The high yield investors would be the target, however, the lack of regulation has created numerous concerns. A lot of bond portals have flourished in the past two years, this is because investors have been looking for alternate debt assets. Many startups have launched portals. They are like GoldenPi, AltiFi, Wint Wealth, Harmoney, CredAvenue, INR Bonds, as well as BondsIndia.
Others also follow up, like Bondskart, The Fixed Income, IndiaBonds, and YIELD. The co-founder and director at IndiBonds, Aditi Mittal argued that these inevitable bonds would create an important part of portfolio in people’s investment. This is for the sake of efficient execution. Retail investors have been looking at alternative debt products. The reason is due to the massive fall in the all time low of fixed deposit rates which is 5%-5.6%. The fixed deposit rates have been performing under water for three years.
In addition, there has been retail inflation looming in the range of 7.8%. It has eroded returns, thus retail investors are looking for other alternatives. The founder and CEO of INR Bonds, Arjun Parthasarathy, argued that the bond portals offer a retail investment avenue by giving them inflation-adjusted returns. The basis points for the net returns for investors buying corporate bonds are 200-400 basis. This is more than the fixed income.
Investors see this as a route to more preferred investment. Because, they keep questioning whether or not putting money in managed credit funds is worth it. Investors missed faith in debt mutual funds, not exceptionally the credit funds. The major cause is the disrupted performance in some of the funds.