Business Standard

Big rush for Nifty-linked bonds

Related News

The product is sold in India by DSP-Merrill Lynch, (a part of the Citigroup) and Rank Investments, the NBFC arm of Barclays Bank. The product is gaining ground as a new asset class among investors.  Though the structure and interest rates on the product vary from issuer to issuer, bankers said that 40 per cent-plus annual returns provided by the are instilling confidence among issuers and investors to structure the product benchmarked against the stock index.  Typically, the minimum ticket size for such bonds is Rs 10 lakh and the product is sold through mainly foreign and private banks to their clients in India. The investors in these bonds will have a lock-in period of 15-39 months.  The interest rates on such products also vary from 7-10 per cent, depending on the rating provided by credit rating agencies. The most popular, say bankers, is the zero-coupon Nifty-linked product.  If the Nifty gives negative returns, investors will get the principal amount back, according to the way the product is structured.  

Read more on:   
|
|
|
|
|

Big rush for Nifty-linked bonds

High networth investors lap up structured products sold by foreign banks The product is sold in India by DSP-Merrill Lynch, (a part of the Citigroup) and Rank Investments, the NBFC arm of Barclays Bank. The product is gaining ground as a new asset class among investors.  Though the structure and interest rates on the product vary from issuer to issuer, bankers said that 40 per cent-plus annual returns provided by the are instilling confidence among issuers and investors to structure the product benchmarked against the stock index.  Typically, the minimum ticket size for such bonds is Rs 10 lakh and the product is sold through mainly foreign and private banks to their clients in India. The investors in these bonds will have a lock-in period of 15-39 months.  The interest rates on such products also vary from 7-10 per cent, depending on the rating provided by credit rating agencies. The most popular, say bankers, is the zero-coupon Nifty-linked product.  If the Nifty gives negative returns, investors will get the principal amount back, according to the way the product is structured.   image

Read More

Sensex ends at 3-week low; sentiment still weak

The Sensex fell to a three-week low on Monday after disappointing quarterly earnings hit Bank of Baroda and IDFC, while investors continued to book ...

Recommended for you

Quick Links

Market News

Nickel rises by 0.1% on Asian cues

Traders strengthened positions amid a firming Asian cues

Oil prices rise further in Asia

Expectations of a decline in US crude inventories and robust economic data from the eurozone helped prices

Markets remain rangebound; HUL up over 2%, Hindalco dips 1%

Investors are optimistic about a possible solution between Greece and its international creditors to avert a debt crisis

Pharma shares in focus; Aurobindo Pharma hits new high

JB Chemicals, Alembic Pharma, Aurobindo Pharma, Ipca Laboratories and Dishman Pharma were up 3%-11% each.

Infinite Computer gains on board approval for share buyback proposal

The stock spurted 5% at Rs 171 after the board approved the buyback of shares at a maximum price of Rs 220 per share from the open market ...

 

Back to Top