Alternative investment platform Grip has forayed into securitized debt instrument (SDIs) offerings, which will be launched on the National Stock Exchange (NSE) on Friday.
The offering is the first of its kind by a fintech company in India and also to launch on NSE. Grip is expanding its range of offerings and opening up pathways for individual investors to invest, chief executive officer Nikhil Aggarwal said in a telephonic interaction with VCCircle.
The product is a rated and listed fixed income instrument offering 18% internal rate of return (IRR) to individual investors, Aggarwal noted.
SDIs are a fixed-return investment instrument introduced by SEBI in 2008. Companies, non-banking financial companies (NBFCs), and banks often enter into business transactions in which they earn regular monthly income under long-term contracts. This could be interest income for an NBFC or lease rental for a company or subscription rental for a SaaS (Software as a Service) company. An SDI is a mechanism to convert these contracted streams of income into a financial investment. An investor holding an SDI effectively purchases the rights to those future receivables at a discounted rate. This allows them to generate attractive returns with monthly fixed payouts.
The SDI offering aims at investors looking to diversify their portfolio and includes companies like Furlenco, Zypp Electric, BigSpoon, and Battery Smart. The minimum investment starts at Rs 10 lakh, Aggarwal said.
The alternative investment product is a Crisil-rated financial instrument and has been executed in-line with the Securities and Exchanges Board of India's (SEBI) regulations.
“The listing of securitized debt on NSE marks a milestone for the debt segment. NSE is committed to the development of the debt market in India. This issuance shall pave the way for the listing of more securitized debt instruments. NSE has been playing a pivotal role in developing the Indian capital markets and has introduced several new products and services such as derivatives, ETFs, SLB, EBP, and REITS/InvITs,” said Ashish Kumar Chauhan, managing director and CEO, NSE.
Grip, founded by Aggarwal, Vivek Gulati and Aashish Jindal in 2020, acts as a link between companies and retail investors to fulfill the capital needs of firms. Grip raised a total funding amount of $4.8 million and $3 million in a Series A round led by Venture Highway and Endiya Partners in August last year.