Over the past few months, bond investments have caught the imagination of investors as interest rates rose. India has seen many investment platforms mushroom. Market regulator SEBI came up with new norms that set the stage for better grievance redressal, to ensure only serious players stay as investor protection remains paramount. In this backdrop, we review Zerodha VC arm-backed GoldenPi, one of the first fintechs to bring bonds and debentures to individual investors.

What GoldenPi does

Online bond marketplace www.goldenpi.com is controlled by GoldenPi Technologies, a Bengaluru-registered platform. The online platform aggregates ‘AAA’ to ‘A’ rated bonds across institutions, including private sector banks, NBFCs, and State governments, and lists them with their current purchase price. The platform powers bond investments in partnership with institutions such as Zerodha, Axis Direct and IIFL Securities.

In the default mode, the bonds are arranged as per yield (from highest to the lowest). You can filter bonds by preset criteria such as investment purposes, credit rating (AAA, AA and A & below), yield (currently highest is 12.31 per cent and lowest is 4.95 per cent), payment frequency, issuer type, tenure remaining, instrument seniority, NRI eligible, etc. The minimum investment for bonds currently on the platform is ₹2.1 lakh (Navi Finserv) and maximum is ₹1.11 crore (NABARD). Goldenpi claims to have facilitated over ₹1,500 crore worth of total transactions on its platform and counts over 2.5 lakh registered users. 

GoldenPi takes care of the entire bond investment process starting from KYC processing until bond units get transferred to the customer’s demat account (NSDL or CDSL). Interest payments go directly to your bank account. On maturity, the bond face value is also credited to the bank account.

If you want to sell bonds before maturity, you can put them up for sale on BSE/NSE. Alternatively, you can reach out to GoldenPi and its team will help you to sell your bonds.

Charges

For bonds/debentures purchase, the investment amount needs to be transferred to the counterparty settlement authorities (ICCL/ NSCCL) bank account held with Reserve Bank of India. The money transfer mode is compulsorily RTGS. The units will be transferred to your demat account.

As of now, GoldenPi doesn’t charge the customers for any transaction.

However, it may receive a commission from the issuer every time a transaction is conducted through its platform, etc. 

From an investor perspective, note that TDS is not deducted on interest received from listed bonds and debentures, as per the website.

What’s hot

While bonds provide returns and can be a good passive income source, they had for long remained accessible only to HNIs and financial institutions. Platforms such as GoldenPi have helped retail investors leverage bonds. . The platform has used technology and given an e-commerce feel to bond investing. The KYC process, buying of bonds etc., along with the amount of information on each bond listed, are easy to understand and helpful.  

What’s not

Make no mistake about it, direct bond investing is no walk in the park. GoldenPi has made direct bond investing possible, but this also opens up the problems that can happen if you don’t know much about bonds. While many compare bonds with SBI fixed deposits, it is not so, especially when private-sector companies as bond issuers are involved. The chase for higher yields exposes one to greater risks. Complications are involved when you are dealing with unsecured bonds, perpetual maturity bonds, call dates, etc. Ratings or information memorandum during issue for corporate bonds are also not written in stone, as the situation can change over time. 

Our take

Unlike some bond platforms that sell instruments issued by start-ups, the bonds listed on GoldenPi offer greater comfort as they belong to a wider set of issuers such as State governments, PSU banks, government-owned firms, private sector lenders and corporates. 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. Having said that, direct bond investing is not everyone’s cup of tea. Do your due diligence. Start with the lowest risk government securities and build your investment portfolio with debt mutual funds first. Venture into non-government bonds directly only when indirect vehicles no longer serve your purpose.  Remember, this is an aggregator platform, and there is no advice.     

Related Topics
comment COMMENT NOW