Convertible Bonds: Convertible bonds are exceptional securities that have features of both bonds and equity options. The holders of convertible bonds have the opportunity to convert bonds held by them into specified number of company’s equity shares during validity period for options mentioned in the bonds. The bond holder also receives the coupon payment till…
(This post explicates the difference between coupon rate and yield to maturity) Bonds: A bond is a debt instrument issued by a company or the Government to raise capital by way of borrowing from the investors. The investors in the bonds are debt holders (lenders/creditors). The issuer of bonds is obliged to pay bondholders the…
Masala Bonds are debt instruments that help to raise money in local currency from foreign investors. Both the government and private entities can issue these bonds. They work just like any other normal bond, but can only be issued outside India. The issue of these bonds is in Indian currency rather than the local currency…
A foreign currency convertible bond (FCCB) is a special kind of convertible bond issued in a currency different than the issuer’s domestic currency. Multinational companies and governments routinely issue bonds denominated in various currencies to benefit from lower borrowing costs, and also match their currency inflows and outflows. FCCB gives investors an opportunity to convert…
Definition of Optionality in Bonds Optionality in bonds refers to the option-like features embedded within certain bonds. These features, known as embedded options, provide either the bond issuer or the bondholder with specific rights, though not obligations, to take certain actions in the future. What Are Embedded Options in Bonds? Embedded options are integral components…
The Pension Fund Regulatory and Development Authority (PFRDA) made several changes to NPS including maximum age for entry-exit rules, choice of PF & Asset allocation, online exit facility, etc. PFRDA vide Circular no.: PFRDA/2021/36/SUP-CRA/14 August 26, 2021, revised the age of entry to NPS from 18-65 to 18-70. “In response to the large number of…
The objective of the New Pension System (NPS) is to offer the market-based return on the investments which would deliver income security to the investors at their old age in the form of monthly pension. The scheme was originally introduced by the Government of India to provide a new scheme of pension to its staffs…
Real estate services encompass a wide range of professional offerings related to the purchase, sale, lease, rental, appraisal, and management of real property. These services are typically delivered by qualified professionals such as real estate agents, brokers, consultants, and property managers. They support both individuals and businesses in navigating the complexities of the real estate…
IntroductionAlternative investments represent financial assets that fall outside traditional categories like stocks, bonds, or cash. These investments offer investors access to unique opportunities for growth, wealth preservation, portfolio diversification, reduced volatility, and potential tax benefits. In India, the Securities and Exchange Board of India (SEBI) classifies Alternative Investment Funds (AIFs) into three categories: Category I,…
Pursuant to Finance Ministry modified the PM Vaya Vandana Yojana (PMVVY) pension scheme for senior citizens, Life Insurance Corporation of India (LIC) has launched the non-linked, non-participating, pension plan subsidized by the Centre. The scheme will provide an assured rate of return of 7.40% per annum. This plan will be available for sale commencing from…