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

Advertisements

Quick Links

Market News

Brent crude steadies above $65

Brent crude reversed early losses to steady above $65 on Monday as signs that US shale output may have started to decline offset the effects of ...

Today's picks- 27 April 2015

Nifty, Bank Nifty, Cairn & Bharti Airtel

Pulses, oilseeds trade gets relief from stock limits in Maharashtra

However, prices are likely to rise, given the possibility of stock building by large traders

CME, ICE plan exchanges at GIFT City IFSC

Looking to partner exchanges that have shown interest

BSE moves 122 cos on Vadodara SE to dissemination board

Among the vanishing companies are Addi Commercial Enterprises, Anand Dairy, Baroda Dying, Gujarat Apparels, Zen Shaving and Rainbow Housing ...

 

Back to Top