Buy Corporate bonds online with Altifi
Fixed Returns by Investing in Corporate Bonds in India
Explore diverse investment options with Altifi's extensive range of Corporate Bonds. With the backing of the Northern Arc Group, Altifi offers a secure platform to invest in bonds from top-rated companies. Find investment avenues tailored to your financial goals. Start building a diversified portfolio with Altifi today, focusing on Corporate Bonds for better returns. We deliver real-time market data, expert analysis, and seamless transactions, helping you diversify your portfolio and discover new opportunities. Our dedication is to break down barriers, making bond markets accessible to everyone, so you can invest confidently and benefit from the changing financial landscape.
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AAAAditya Birla Capital Limited
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Know more about Corporate Bonds
What are Corporate Bonds?
Corporate Bonds are debt instruments issued by public and private corporations. These bonds are issued to raise capital for various business needs such as constructing new facilities, purchasing equipment or expanding operations. When you buy a Corporate Bond in India, you lend money to the issuing company. In return, the company commits to repaying the principal amount at a predetermined maturity date and pays interest until that date.
Features of Corporate Bonds
Fixed Interest Payments
Corporate Bonds have a fixed coupon rate/interest rate. The issuer of Corporate Bonds offers regular interest payments, providing a steady income stream for investors.
Principal Repayment
At maturity, bondholders receive the principal amount. This principal repayment provides the return of the initial investment.
Maturity Periods
Corporate Bonds come with various maturity periods. They can range from short-term (less than five years) to long-term (up to 30 years or more), offering flexibility based on your investment goals.
Yield
Yield measures the return on a bond investment. It helps you compare different company bonds. Unlike the bond's fixed coupon rate, the yield fluctuates with changes in bond prices due to varying interest rates.
Secondary Market Trading
Listed Corporate Bonds in India provide liquidity as they can be bought or sold on the secondary market before their maturity date. This flexibility allows you to adjust the investment strategy based on market conditions or liquidity needs.
Credit Ratings
Corporate Bonds in India are assigned credit ratings by agencies such as ICRA, CRISIL, CARE, etc. based on the issuer's creditworthiness. Higher credit ratings indicate lower credit risk and vice versa. You can also compare them with Treasury Bills for safer options. For related reading, see types of government securities.
Advantages of Investing in Corporate Bonds
Attractive Interest Rates
Corporate Bonds typically offer attractive interest rates, facilitating a potentially higher yield.
Potential for Capital Appreciation
While bonds are primarily designed to provide fixed income, listed Corporate Bonds in India may also offer potential capital appreciation. You may have the opportunity to sell your Corporate Bonds at a price higher than the purchase price in the secondary market.
Diversification of Investment Portfolio
Including Corporate Bonds in an investment portfolio can enhance diversification and may help reduce overall portfolio risk. Corporate Bonds often have different risk-return profiles compared to stocks. They provide a balanced approach when it comes to portfolio management.
Predictable Income Stream
Corporate Bonds issued by reputable companies with high credit ratings may offer a relatively safe investment option. They provide a predictable income stream and the assurance of principal repayment at maturity, mitigating the risk of capital loss.
How do Corporate Bonds Work?
Corporate Bonds are significantly influenced by changes in interest rates. When interest rates fall, the value of existing Corporate Bonds rises. Conversely, when interest rates rise, the value of Corporate Bonds tends to decrease. Because of this inverse relationship new bonds issued at higher interest rates make existing bonds with lower rates less attractive, thus decreasing their market value. Therefore, selling a bond before it matures can result in a price different from the initial purchase price, depending on the prevailing interest rates.
The degree of price volatility is generally higher for bonds with longer maturities. However, if you hold a bond until its maturity date, these price fluctuations become less of a concern as you will receive the bond’s par or face value at maturity while reinvestment risk remains.
Why Buy Corporate Bonds Online with Altifi?
Wide Range of High-Quality Investments
Altifi provides access to a diverse array of Corporate Bonds in India from high-quality companies. Our platform allows you to explore various opportunities in the debt market. Learn more in our guide on Investing in Bonds: Types, Features and Benefits.
Seamless Investment Process
Through Altifi, you can easily and securely invest in Corporate Bonds in India. Our platform supports quick registration and KYC verification process with multiple payment modes to make the investment process convenient and efficient. It simplifies your experience with a streamlined digital onboarding process, saving your valuable time.
User-friendly Platform
Designed for Altifi’s user convenience, our bond investment platform allows you to effortlessly explore, compare, and invest in various assets. With an intuitive interface that provides in-depth information on interest rates, maturity dates, and credit ratings, you can make informed decisions with confidence.
Real-Time Portfolio Monitoring
Altifi offers tools to monitor the performance of your investment portfolio anytime, ensuring you stay informed and in control of your investments.
Part of Northern Arc Group
Altifi, backed by Northern Arc, a top Indian NBFC, is a cutting-edge platform for fixed-income investments. We streamline bond buying through an intuitive interface, offering a variety of instruments. With real-time market data and expert insights, Altifi opens-up the bond market platform, enabling you to diversify and discover new investment opportunities. Northern Arc empowers investors by providing access to data-driven technology, deep sector expertise, and a democratized investment platform like Altifi.
Impact Investing Opportunities
Altifi lets you align your investments with your values. You can invest in companies that are making a positive impact on underserved sections of society through our platform. Explore ethical investments like Sovereign Gold Bonds.
What are the types of Corporate Bonds in India?
The types of Corporate Bonds include:
Fixed Rate Bonds:
Fixed rate bonds offer fixed interest payments, known as coupon payments. The interest rate is determined at the time of issuance as a percentage of the bond's face value. These bonds can be considered if you are seeking sustained returns and prefer certainty in cash flows, as the interest payments remain constant throughout the bond's life.
Floating Rate Bonds:
Floating rate bonds have their interest rates tied to a benchmark rate, such as a government bond yield or MIBOR (Mumbai Interbank Offered Rate). As the benchmark rate changes, the interest rate on the bond adjusts accordingly.
Convertible Bonds:
Convertible bonds combine features of both debt securities and equities. You can get regular interest payments like regular bonds. However, you can convert the bond into a predetermined number of equity shares of the issuing company at a predetermined date or under specific conditions.
Non-Convertible Debentures (NCDs):
NCDs cannot be converted into equity shares and remain purely debt instruments, providing fixed income without the prospect of equity ownership.
Secured Bonds:
Secured bonds are backed by the assets of the issuing company. In case the company defaults, bondholders have a claim on these assets. These bonds offer lower risk since they are protected by collateral, providing more security for your investments.
Unsecured Bonds:
Unsecured bonds are not backed by any collateral, which means bondholders do not have a claim on the company's assets if they fail to meet their obligations. These bonds carry relatively higher risk compared to secured bonds but may offer higher interest rates to compensate for the additional risk.
Callable Bonds:
Callable bonds give the issuing company the right to redeem the bond before its maturity date. This usually happens when interest rates fall, allowing the company to refinance the debt at a lower rate.
Puttable Bonds:
Puttable bonds give the investor the option to sell the bond back to the issuer before its maturity date, providing flexibility if market conditions change or the issuer's credit profile weakens. This feature offers additional protection by allowing early exit from the investments.
Corporate Bonds FAQs
How secure are Corporate Bonds?
Corporate Bonds vary in security depending on the issuing company's creditworthiness. Corporate Bonds in India issued by financially stable companies with high credit ratings are generally considered safer, with lower default risk. However, all bonds carry some level of risk, including the potential for default if the issuing company experiences financial difficulties.
Who should invest in Corporate Bonds?
Corporate Bonds are suitable for investors seeking fixed income with potentially higher yields. They are considerable investment options if you are looking to diversify your portfolio and reduce overall risk.
Is Corporate Bond better than FD?
Corporate Bonds and Fixed Deposits (FDs) cater to different investment goals and risk tolerances. Corporate Bonds offer potentially higher returns but involve market risks. In contrast, FDs are safer as they are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to a limit of ₹5 lakh, providing a fixed return with minimal risk. The choice between them should align with the investor’s financial objectives and risk appetite.
What is the interest rate of Corporate Bonds?
Interest rates or coupon rates on Corporate Bonds in India vary widely based on factors such as the issuer's credit rating, prevailing market conditions and the bond's maturity period. Typically, bonds with higher interest rates compensate investors for the increased risk of not fulfilling the obligation.
How are Corporate Bonds rated?
Corporate Bonds are rated by credit rating agencies such as CARE, ICRA, CRISIL, etc. based on the issuer's creditworthiness. Ratings range from AAA rated bonds (highest credit quality) to D rated bonds (in or expected to be in default).
What is the maturity of Corporate Bonds?
Corporate Bonds in India have varying maturity periods: short-term (less than five years), medium-term (five to ten years), and long-term (more than ten years). These periods significantly influence the bond's risk and return profile.
How do Corporate Bonds in India differ from stocks in India?
Corporate Bonds in India represent debt issued by a company and provide fixed income through regular interest payments. In contrast, stocks represent ownership in a company and offer potential for dividends and capital appreciation. Also, bondholders have priority over stockholders in the event of unfavorable circumstances, such as bankruptcy.
Why should I choose Altifi to buy Corporate Bonds in India?
Altifi, part of Northern Arc, one of India's leading NBFCs, is an innovative digital platform for fixed-income investments. We simplify bond buying with a user-friendly interface and a diverse range to invest in Corporate Bonds in India. With real-time data and expert insights, Altifi makes the bond market accessible, helping you diversify and explore new opportunities.
