Bondskart: Should you buy bonds on this platform?

With interest rates rising over the last few months, bond investments have caught the imagination of many investors on account of even higher yields. The online bond marketplace world has witnessed a profileration of players, with investing in bonds today becoming as easy as dropping them into your shopping cart and paying at the checkout. We review BondsKart, which is backed by JM Financial.

What Bondskart does

BondsKart is supported by JM Financial’s Institutional Fixed Income Division (IFID), which was incorporated in 2019. As per Bondskart, the IFID team has credit analysts with wide experience in corporate credit and carries out in -depth credit analysis on a wide variety of issuers. Consequently, JM Financial says it participates and distributes only the issues that pass muster from the in-house credit sieve. At present, it offers 33 bond opportunities. You can filter them based on rating, interest payment frequency, yield, minimum investment, coupon, bond issuer type, tenure remaining, NRI eligibility, bond face value, issuer mode, tax on interest, secured, seniority, perpetual, and call/put option.

BondsKart is only a facilitator of bond investments and not the issuer of the bonds. It claims to host only premium-grade bonds that are between AAA and AA credit rating. As per the latest offerings on the platform, AAA rated bonds come with minimum investment of ₹20,000 and can go up to ₹11.63 lakh. AA-rated bonds can be bought with minimum investment of ₹2.49 lakh to ₹10.60 lakh. Under ‘others’ category, the minimum investment is ₹2.48 lakh and maximum is ₹10.33 lakh.

BondsKart does not charge any fee or commission for any investment made through it.

If you want to sell bonds before maturity, you can put them up for sale on a convenient platform/exchange. Alternatively, you can reach out to Bondskart and seek its team’s help to sell your bonds.

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Bond buying process

The first step is the KYC process. Following this, all documents required to get you started on your investment are processed. For investing in bonds/debentures, the investment amount needs to be transferred to the bank account of ICCL/NSCCL — settlement authorities held with the RBI. The money transferred has to be via RTGS mode. Once done, the units bought are transferred to your demat account possibly on the same day. According to Bondskart, the bonds settlement takes place through the DVP (Delivery versus Payment) settlement method on ICCL and NSCCL.

Our take

While Bondskart makes a good attempt at presenting a user-friendly interface and providing relevant bond information, investors have to do their own research and homework. Consult professional financial and wealth advisors before investing in bond securities.

Bond investment process may appear as easy as ordering groceries on e-commerce apps, but direct bond investing is no walk in the park. The lower you go down the rating spectrum, the higher the risk involved. Complications are involved when you are dealing with unsecured bonds, perpetual maturity bonds, etc.

With SEBI norms in place for regulating online bond platform providers, investors can look towards more checks and balances in the form of transparency in operations and disclosures.

First-time bond investors should start with the lowest risk securities and build your investment portfolio with debt mutual funds first. Venture into direct bonds only when existing routes don’t provide a solution.

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