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These are Debt Instrument issued outside India to raise Money. And this instruction would be bought only in INR and I believe that might help in INR appreciation.
It's great that you are talking about bonds, but since you showed the The South Indian Bank bond it would have been better to mention some of them are perpetual. People could jump in without exactly knowing what parameters to look for.
I’ve been diligently working, saving and contributing towards financial freedom and early retirement, but the economy so far since the pandemic has eaten away most of my portfolio, what I want to know is this: Do I keep contributing to my portfolio in these unstable markets or do I look into alternative sectors.
I’m a contractor, and my job doesn’t permit me the time to properly analyze my holdings/evaluate stocks myself, so I’ve had a fiduciary actively restructuring my portfolio for the past 7 years now to match the present market condition and that’s how I’ve been able to stay afloat, knowing when to buy and sell…maybe you should do the same.
“Sonya lee Mitchell’’ is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I like investing in close-end funds that pay monthly dividends. The trick is to hold long term and reinvest the monthly dividends plus buy more shares on a monthly basis or whenever you can afford to. This can be easily done because close-end funds are bought and sold on the stock market like regular stock. That’d be enough to create a portfolio that would pay you between $50k to $70k in dividend income
The availability of opportunities in the market doesn’t mean you should go in blindly. To understand the potential factors that contribute to your financial growth, I'll advise you to seek the help of a professional
I agree; I have about $1m in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, having a portfolio-advisor for investing is genius!
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
I have been a dividend focused investor for a long time. This does not mean I don't own growth stocks, I do. A well rounded portfolio should be a mixture of both categories. One way to minimize the anxiety out of stock market investing, is to make sure you keep a large cash cushion. I invest in the market, but never put all my money in market.
I agree. Based on personal experience working with an investment advisor, I currently have $1m in a well-diversified portfolio that has experienced exponential growth. It's not only about having money to invest in stocks, but you also need to be knowledgeable, persistent, and have strong hands to back it up.
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?.
Great video, One thing I know for a fact Financial Success don't happen overnight, While people like Warren Buffet, Elon Musk, Jeff Bezos all talk about the importance of investing, I've been keen to invest lately, my challenge is knowing when to sell/hold and how to grow profit consistently even in an unsteady market.
It's alright, the average investor struggles with when to sell or hold, as for making consistent profit even during a market crash, your best bet is having a professional guide you.
@stanleyedwin6947 I just looked her name up out of curiosity and was able to reach her web page on google and email her. I'm hoping she will respond to me shortly. Thank you so much for the tip.
This administration has no idea how people are suffering, things are getting so much harder we can't take it no more. A lot of people are financially struggling to put food on the table and a roof over their head, I appreciate your advice Walter James Henry. Imagine I invested $2,000 and got $10,600.
The process of trading can be complicated when you have limited knowledge. However, with the right strategy and setups, you can be successful. That's the whole point of investing.
Interesting!! I'm so excited, seeing mr Walter, being mentioned here because his strategies have also normalized winning trades for me. and it's a huge milestone for me looking back to how it all started.
Masala bonds - are rupee-denominated bonds as a source of debt financing for the public and private sector in India to raise money from foreign investors. Utility- Reduces currency - related risks and documentation for the issuers. And as a result is able to give higher interest rates(approx. 5% more than SBI's base interest rate).
Successful people don't become that way overnight. What most people see at a glance- wealth, a great career, purpose-is the result of hard work and hustle over time. I pray that anyone who reads this will be successful in life..
Hi Akshat, Masala Bonds are bonds issued outside India and denominated in Indian Rupees. The term was used by International Finance Corporation(IFC) to denote Indian Cuisine and Culture. In Masala Bond the investors take the Currency risk.
Is this really a good time to buy stocks? I know everyone says the mrkt is ripe enough for buying but will stocks tank further this year? How long until a full stock recovery? How are other people in this mrkt raking in over $250k gains within months, I'm really just confused at this point.
I am 18 y/o. So, I would try to answer this such a way that even a 15 y/o can understand. As the word suggests, "Masala" which is used in food for taste. Similarly, masala bonds gives foreign investors a way to have a taste in investing in India. These are Rupee denominated bonds which means returns or interest paid is calculated in terms of rupees which saves borrower even if rupee gets depreciated. These bonds are low risk and generally used for Affordable housing, working capital for companies, refinancing loans, etc. Also capital gains from these bonds are exempted from taxes.
Thank you Akshat for the Useful and practical Content. Masala Bonds utility in my view are 1. Issuer perspective: Forex risk is negligent (earnings and borrowings in same currency); relatively lower cost of borrowing 2. Investor perspective: relatively higher yield, portfolio/currency diversification, if issued by Govt - sovereign backing, low default risk (relatively better credit rating for India than other economies)
Masala bonds generate a higher interest rate, bring more foreign sum in the country, and also contribute to foreign investment of a country. It can be raised to the ₹ equivalent to USD 50 million in a financial year.
Masala bonds are the bonds issued outside India, by an Indian entity. It is a debt instrument issued by an Indian entity in foreign markets to raise money, in Indian currency, instead of dollars or local denomination. The major objectives of Masala Bonds are to fund infrastructure projects, ignite internal growth (via borrowings) and internationalize the Indian rupee and helps in building up foreign investors' confidence in the Indian economy. And Akshat, your explanations are super easy to understand. Feels like getting advice from a super professional. Would be great to see your professional attire as well in coming videos ;) And yes foremost, the glasses. Thanks for sharing the knowledge
Utility of Masala Bonds Due to rupee depreciation risk (exchange rate risk) Bond Issuer has to pay more amount while redemption, So Masala bonds transfer the currency risk from issuer to borrower, Which ensures the benefit of Indian Issuer
I've been making weekly passive income from crypto for over 5 months tho' I prefer trading with the help of a professional broker because it saves me time and reduces the risk of losing funds in trading as we all know how volatile the market is
Reading about people grabbing multi-figures monthly as income in investment even in this crazy days in the market,any pointers on how to make substantial progress in earnings? would be appreciated!
Answer- 1.)Masala bonds was made to add masala(spice up) indian economy by boosting foreign investment in indian currency and to boost infrastructure development. 2.)It also attracts foreign investors as it offers higher rate of interest compared to developed countries. 3.)Generally interest rates of other currencies are lower so helps in issue of higher funds via indian rupee and make it more global. 4.)It will help in the development of domestic bond markets due to competition from overseas investors. 5.)The best part is that even if the indian rupee falls all risk is ith the investor and not ith the issuer which is an indian entity. TOOK me time to understand and pen down points about utilities of masala bond. Thank you for making me aware about this topic.
Thanks for your feedback , I will also advise you get a good life by starting to invest , especially on stock market and crypto currency,I will refer you to my trade analyst and financial guru to assist you and make good profits ...
Having a dynamic strategy cannot be overemphasized when trading forex. The best advice I could give to any forex trader is don’t trade if you don’t have a working strategy.
I’ve only been trading a couple weeks and I’m still yet to make my first $100, I’m still trying improve on my trading techniques and strategies and I would really like to make profits from the forex market too
I’ve made a loss of over $2500 trading in my own where can I find an expert to help me recover my losses and also help me earn consistently from the forex market.
I'll suggest my expert VIVIAN KLAINE MORGAN I trust she could put you on the part to financial freedom with her ever winning strategies. You’re always guaranteed 90% profits trading through her
Hi Akshat, 1. Masala bonds are used in refinancing rupee loans and non-convertible debentures. 2. In real estate activities for the development of integrated townships and affordable housing projects. 3. These bonds provide the working capital to corporate and perform the activities
masala bonds: it is an Indian word for spices, to stimulate the culture and cuisine of India on the international platform. The first Masala bond was issued in 2014 by IFC for the infrastructure projects in India.
Masala Bonds are rupee-denominated bonds. It is a debt instrument issued by an Indian entity in foreign markets to raise money, in Indian currency, instead of dollars or local denomination. Utility or benefits: ▪︎ cost of funds is cheaper and is issued below 7% interest rate. ▪︎Do not have to worry about the depreciation of rupee. ▪︎Easy medium to internationalise Indian rupee. There are some more utility or benefits to masala bond . We need to learn and invest. Thank you sir 😊
Masala bonds - are rupee-denominated bonds as a source of debt financing for the public and private sector in India to raise money from foreign investors. Utility- Reduces currency - GETS HIGHR RATE OF INTEREST
Hey Akshat, I think the key utilities of Masala Bonds include: 1. Access to Global Capital 2. Currency Risk Mitigation: Since the issuer does not bear the exchange rate risk 3. Interest Rate Advantage 4. International Presence and Reputation 5. Diversification of Investor Base 6. Boosting Foreign Investment 7. The Indian government encourage the issuance of Masala Bonds 8. Promotion of debt in Indian Rupees So, overall, Masala Bonds offer a strategic financial tool for Indian entities to leverage international capital markets while managing currency risks effectively.
Hi Akshat, Basic Understanding : Masala Bond is a debt instrument by which an Indian Entity can raise money from Foreign Market, in Indian Currency, instead of local currency or dollars. Utility of Masala Bond: 1. It allows an Indian company to diversify its funding sources and reduce its borrowing costs by taking advantage of low interest rate in the overseas market as compared to India 2. They also allow an Indian company to tap into global liquidity without incurring currency risk. Since these are rupee-denominated and are ultimately settled in a foreign currency, the currency risk falls on the overseas investor. 3. It helps in building up repo/value/name of INR in International Market, by making it familiar to International Investors. 4. It will also boost the development of domestic bond markets due to competition with overseas market. Thanks for making your videos interesting by asking these research needed questions. By the way, where's the Book Club now? 😎✌️
Masala bonds are issued by Indian entities, outside India. These are issued in the local currencies. Benefits for investor are higher interest rates, benefits from rupee appreciation at time of maturity. Benefits of issuer are large audience, cut down in costs and safeguard from any fall in rupee price.
Hello My self Jagprit singh As asked utility of "masala bonds" 1. It has made companies either domestic or international easy to borrow money where the interest rate is low.(or from where they can get money in low rates). 2. In one or another way domestic companies management can believe in international markets for money lending . 3. Another key utility for masala bond is that it allows corporates to borrow money with out any pressure as in masala bond the investor has the risk and for a renowned company it becomes easy to raise fund from international market
Masala bonds are such kind of bonds which is issued outside india and expressed it's value in indian ruppees. Utility of these kind of bonds are- * It offer higher returns compare to other type of bonds *The capital gain received out of such bonds are exempted from tax *It improve and develop the confidence of foreign investors in the indian economy
1. Masala bonds are "Rupee denominated bonds" which were introduced to boost infrastructure development. 2. One can issue bonds worth 50 billion for a maturity period of 3 or 5 years. For example: I wanna raise ₹100cr from any foreign country let's say the USA (which will be 14 million USD) and I promise to give ₹110cr with Intrest (which is 15.5 million USD). Here, if the exchange rate of USD to INR fluctuates, let's say it becomes ₹70 to ₹75, then in Masala bond, you don't have to pay the increased price because the price of the bond is already decided by International Finance Corporation which is the broker in World Trade Center. So, here I do not have to pay Rs.116cr ($15.5 million X 75) rather I would pay Rs.110cr ($15.5 million X 70). So, by this system, it creates competition with the Indian bond market. And also saves the company unnecessary expenses. P.s- Hey Akshat, first of all, a big fan. Hope you like my explanation. Hemil Shah
MASALA BOND ANSWER :- Hello Sir, I am a permanent resident of Andaman & Nicobar Islands. I am your permanent viewer and never miss your videos. Your presentation is very good and also your English pronunciation also very nice and easy to understand. L learned more knowledge from your videos. Sir keep doing good job. Thanks . Masala Bonds are rupee-denominated bonds. It is a debt instrument issued by an Indian entity in foreign markets to raise money, in Indian currency, instead of dollars or local denomination. In 2019, Kerala became the first Indian state to issue Masala Bonds worth Rs. 2,150 crore on the London Stock Exchange. State-owned Kerala Infrastructure Investment Fund Board (KIIFB) had issued the bonds to raise funds in the overseas market.
The video of the thumbnail shows monthly income however the video goes on about how the interest rate we achieve is yearly. This is the second video I am seeing on your channel from which the topic on the video thumbnail is being used to get more views. Please stay with the content as per written on your video thumbnail.
Masala bonds are the bonds issued outside India by an Indian entity in INR. The major objectives of Masala Bonds are to fund infrastructure projects, ignite internal growth (via borrowings) and internationalise the Indian rupee In case of any risk, the investor has to bear the loss and not the borrower.
Masala Bonds are bonds issued for people outside India in local currency (i.e rupees). Benefits: 1. If the rupee appreciates at the time of maturity, it benefits the investor. 2. Increase global investors to invest in Indiain projects. 3. Capital gains are exempted from tax.
Masala bonds are the bonds issued by the Indian entities in the international market for raising funds. It is raised in the rupee currency rather than issuing it in the local currency of the country where it is issued. The name of the bond i.e. the "masala bond" was given by the International Finance Corporation because India is known for its spices and cuisine.
Hi Akshat, Honestly speaking, I had no idea about masala bond, I thought it might be related to indian spices. But I read about it and I'm clear about the concept now. Thank you for making us do some research by ourselves as well. What I understood from my reading is that - When we take a loan internationally and issue bond, it is done in foreign denominated bonds(like dollar/Eur/Pounds). But Masala bonds are Rupee Denominated bonds, so that we can cover our exchange rate risk. For example if I take a loan of 100$ which is 7,505.30 INR for now. Now after 2 years if I have to pay back my loan, and by that time if 1$ has become 100INR, Then I will have to pay around 10,000/-. However, In Rupee Denominated bonds, foreigners have to convert their dollars in rupee. So the exchange rate risk is on lenders. And we need to pay only 7,505.30 INR, without thinking about depreciation value of rupee. Please correct me if I'm wrong somewhere. Feeling great to learn something new by myself.
Hai, I m sasibhushan. Ans to the question u asked: Utility of masala bond is to raise funds for specific projects or general corporate purpose,; & these are issued in Indian rupees, by a indian company / government, butcdold to investors outside India.
Utility of Masala bonds is that they are rupee denominated bonds issued by an Indian firm outside of India but the bonds are issued in rupees and the interest and principal are repaid in dollars. Therefore, these bonds could be a game-changer for Indian businesses.
Masala Bonds are rupee-denominated bonds issued outside India by Indian entities. They are debt instruments which help to raise money in local currency from foreign investors. Both the government and private entities can issue these bonds
Since loosing my job as an air hostess some months back I decided to try something else, what I have found most profitable so far is Options trading and forex because with these two I make close to $ 20k monthly it's great and I'm still trying out other sources.
Sounds to me like a good source because I have come to understand that nature works in our favour once we seek and become conscious, cheers to you and truly I have heard a lot of podcasts and shows regarding Forex and and it's profitability but then never had a chance to try this will be my first time
@@Thyago2420 Well well, I don't pretend to be a great trader of some sort but I am generating good weekly ROi from it. This is thanks to Mr Benjamin ravies, a pro who happens to be the man behind my success in this
@@Lilyoregon Great, funny thing is I was at an IPO the other day and heard Mr Ravies speak at length on the extensive importance of compounding and how the current global situation affects the market
Hi Akshat sir ! So, Indian entities or companies issue masala bonds outside India to raise money. The benefits for the investors are: 1) It offers higher interest rates and thus benefits the investor. 2) It helps in building up foreign investors’ confidence in the Indian economy. 3) It helps strengthen the foreign investments in the country as it facilitates foreign investors’ confidence in Indian currency. 4) The capital gains arising from rupee denomination are exempted from tax. 5) If the rupee appreciates at the time of maturity, it benefits the investor. The benefits for the borrowers are: 1) It benefits the borrower as there is no currency risk. It saves the borrower from currency fluctuations. 2) Borrowers need not worry about rupee depreciation as the issuance of these bonds is in Indian currency rather than foreign currency. 3) The borrower can mobilise a huge amount of funds. 4) It helps the Indian entity issuing these bonds to diversify their portfolio. 5) It aids borrowers to cut down their cost as they are issued outside India usually below 7% interest rate. 6) As these bonds issuing are in the offshore market, it helps borrowers to tap a large number of investors.
Masala bonds : not for Indians(investment purpose), but for India. Indian organizations raise money from abroad using these. Risk : Rupee denominated, so any rupee fluctuation including prevalent conversion rates affects investor. Advantage : Higher interest rates. Also, confidence in India growth story draws investors into thinking positively about exchange rate w.r.t any other currency.
Hi @Akshat , From my understanding Masala Bonds are the bonds issued by Indian entities in Foreign Markets to raise funds in INR. From borrowers perspective 1) it reduces the cost of raising funds (as borrowing rate in developed economies is less than in India) 2)It also benefit borrowers in mitigating the currency risk (otherwise borrowers have to purchase dollars/euros etc and for that they have to buy them either in spot or in futures and have to hedge their positions). From Investors perspective 1) Even foreign small investors can invest in high yield bonds 2) Diversify their portfolio
The Utility of masala bonds are; 1. It offers higher interest rates and thus benefits the investor. 2. It helps in building up foreign investors’ confidence in the Indian economy. 3. It helps strengthen the foreign investments in the country as it facilitates foreign investors’ confidence in Indian currency. 4. The capital gains arising from rupee denomination are exempted from tax. 5. If the rupee appreciates at the time of maturity, it benefits the investor.
Masala Bonds are rupee-denominated bonds. It is a debt instrument issued by an Indian entity in foreign markets to raise money, in Indian currency, instead of dollars or local denomination. In 2019, Kerala became the first Indian state to issue Masala Bonds worth Rs. 2,150 crore on the London Stock Exchange. State-owned Kerala Infrastructure Investment Fund Board (KIIFB) had issued the bonds to raise funds in the overseas market.
Masala bond: 1. No currency or IR risk for issuer 2. At times there are tax benefit on wht for issuer 3. RBI allows an INR instrument to be refinanced by Masala bond which is not the case in ECB.
Masala bonds are bonds issued by Indian businesses out of India. However, these bonds are issued in Indian currency as against the local currency of the country in which it is offered. To raise funds from overseas investors, Indian companies issue masala bonds outside of India. Adesh Dhadiwal
Hi Akshat, The one major point which is missed here is that the "credit rating" agencies have not been doing a good job, rating bonds correctly. Senior Citizen investors may get trapped into buying these bonds( with perceived high ratings) in a high debt, risky enterprises with bad debt/equity ratios. In a super high liquidity, valuations and growth inflated market such as the one we are in, I wish you explicitly explain the risks involved in believing what we see. ( Rating agencies have literally been useless in rating the securities, their incentives are misaligned) So, please explicitly highlight the risks involved for a senior citizen investor.
Masala bonds are rupee denominated bonds issued by Indian entity in another country Utility of Masala Bonds:- 1)The Indian enitity issuing bonds doesn't have to worry about depriciation of Rupee value 2)Listing in any stock exchange will increase the liquidity 3)Increases foreign Investment as it provide high interest rates 4)Helps in diversifying the borrowings 5)FPI increases 6) The capital gains arising from rupee denomination are exempted from tax. 7)INR tradebale ranking improves 8)Forex reserve of the country increases as the person investing has to convert his local currency to INR 9) INR gets stronger
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Masala Bonds is a debt instrument issued by an Indian entity in foreign markets to raise money, in Indian currency, instead of dollars or local currency Example :- Kerala issue Masala Bonds on the London Stock Exchange. But instead taking money in pound they take in Indian rupees. It's help to dominate INR in global and internationalise Indian rupee by making it familiar to the International investors market. companies issuing these bonds do not have to worry about the depreciation of rupee.
Masala bonds: used to bring investment from foreign in India. 1) Interest given in Indian currency. So, investor benefits if Indian economy prosper as rupees gets stronger and vice versa. 2) Prominent companies which are leaders in Indian economies growth like hdfc Bank, yes bank, irfc (doosra itc ;) have raised money from it. Thus, it is safer from that perspective, and also these binds have good ratings bt credit rating agencies making them safe to invest 3) Provides high interest rates as risk is more for the investor (if rupees gets depreciated he is one bearing the loss) 4) currently, Indian economic is considered as the most lucrative investment opportunities due to:" I) China +1 strategy. ii) and also expansion of organised sector, middle case the same way China prospered a while ago. Hope these answers gets selected by you. I will be honored to receive your favourite book :) Thanks.
@Harry Micheals I recommend Mrs Victoria Q. Wilson of UCLA Anderson. she's quite exceptional when it comes to this and her methods are working for me at the moment
@@millerwoods1343 You are absolutely right, I have been working with her for months now, so efficient and professional, always making huge profits for me
The name Masala bond was given by the International financial corporation IFC, Masala means spices in hindi. It would stimulate Indian culture in international platform. Masala bonds are debt instruments issued by Indian entity, outside India, in Indian currency. They are rupee dominated bonds. Meaning funds will be raised from overseas market in Indian rupees. Mainly used for infrastructure development and estate planning. Maturity period depends on amount of money raised in a single financial year. If amount raised by bond is upto rupee equal to USD 50 million then maturity period is 3yrs and if amount raised in 1 financial year is rupee equivalent to more than USD 50 million then the maturity period is 5 yrs In case of any risk , it is born by investor and not the borrower. Main benefit is that capital gains from rupees appreciation are exempted from tax.
Masala Bonds 1) Debt instrument 2) to raise money from outside India from foreign investors 3) Rupee dominated in local currency 4) Masala name given to maintain its uniqueness
Hi Akshat! -Masala bonds are issued outside India to make foreign investors to invest on it, through Indian rupees rather than their local currency. -And also gives them a confidence by providing higher interest rates to the investors. -The name 'Masala bond' is used by the IFC.
I initially did the lump sum buy, 125k into SCHD, 75k TSLA, 25k VYM, 25K VUG. Now I'm dca buying roughly 2k every week of whatever is on sale, and looking to add more tech positions to my portfolio. I'm looking to hold long term 15 - 20 years, so hopefully my lump sum buy in doesn't bite me in the ass long term.
the strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skillset/knowledge to pull such trades off.
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
I just sold a property in Portland and I'm thinking to put the cash in stocks, I know everyone is saying its ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same markt raking in over $200k gains with months, I'm really just confused at this point.
Masala bonds are bonds you inherent or buy when you get the chat kara from eating masala. While your source of chatkara might vary, the growth and the volatility depends on MDH uncle.
Hay Akshat, Masala bond are debt instruments which help to raise money in local currency from foreign investors. For example NTPC issued 2000cr masala bond on 2017
Since these bonds are issued outside of India, they are settled in US dollars (USD). The unique feature of masala bonds is that Rupee currency risk is borne by bond investors instead of bond issuers as it would be if an Indian bank or corporate were to issue in a foreign currency.
Masala bonds are bonds issued outside indian in rupee denomination by an Indian entity in order to raise money. Utility- They offer higher interest rate to offshore investors as in developed countries interest rates are low
This guy started as motivational speaker == > career guidance ==> life hacks ==> savings guide ==> nowadays stock and crypto marketer ==>next intraday trading scam. All internet gurus are scammers.
Hi Akshat, Masala bonds are essentially a debt instrument but relatively more secure. It does have the disadvantages of currency fluctuations associated with it but there are also some tax benefits associated with currency appreciation, if that happens.
"Masala" bonds: What? - Debt raised by Indian companies + govt, targeted for foreign investors. Why? - In Indian currency denomination (country + currency risk exposure) offering higher rate of interest than developed countries. Why now? - A thriving opportunity wrt infrastructure and development in India, perfect time for investing in the largest middle class young economy.
Masala Bonds 1. The investors will directly take the currency risk as the bonds are in Indian currency. 2. If at all the Indian currency falls. The foreign investors have to face loses. 3. Cost of borrowing will be less than domestic markets. 4. Internationalization of Indian rupees can be promoted by masala bonds. 5. Good way to attract foreign capital.
Hi Akshat, even though every body has already written the utility, I think by incentivising the efforts for finding the answer, you made some thousands of people read about the Masala Bonds and that is productive in my viewpoint. I also read about the same, so just noting down one two super important points in my viewpoints:- - Practically speaking, the currency depreciation is borne by investors. So the investments will be from such people who believe in growth story of India. Obviously it gives benefits to the borrower. - Emotionally thinking, it creates awareness of India spices and cuisines in foriegn world. The exports of Indian Spices have been growing at good rate. There are various factors responsible but just making a random, quite illogical analogy.
Masala bonds basically mean a rupee-denominated bond that is when an Indian company issues a bond in the overseas market that is rupee-denominated then it is a masala bond. As it is rupee denominated it is shielded against the currency exchange rate changes. So the risk of rupee depreciation gets transferred to the foreign investor. This type of bond helps to internationalize the Indian rupee and also helps the Indian companies to diversify their funding resources. Also, this bond will support the stability of the Indian rupee.
Capital gain of Rs. 8.50 lakh from house property sale. Should I invest in NHAI or REC bonds @5% with lock in period of 5 years OR can i invest in this amount in Shares, Mutual funds, commodities , gold which is better optioin
Masala Bonds are rupee-denominated bonds issued outside India by Indian entities. They are debt instruments which help to raise money in local currency from foreign investors. Advantages (investors): high interest rates, capital gains-tax free, benefit when rupee appreciates. Advantages(borrower): no currency risk, can be floated at lower interest rates as they are floated outside india
There are lot of utilities, some of them are listed below :- 1. These are rupee denominated bond so it's complete hedge against the exchange rate fluctuation hence variable on this account is freezed. 2. Mostly it's a perpetual in case of Bank raising this ,hence it is not as debt but treated as equity. 3. Mostly it is used as working capital by Company. 4. It is also used as refinancing option of debt in dollar and payment to debentures.. Many more...
How those this whole thing work , I'm interested in it and willing and ready to invest heavily but I need assistance to properly guide me through on how to make good start up and to be successful
Everyone’s been preaching investing lately as a source of passive income but with a 70 hour weekly jobs and limited knowledge of financial instruments, how can I actually stay on top of things, I see every TH-cam video saying BUY BUY! But when and how do I sell for profit at the right time?
Well all i know is that you cannot go wrong taking profit at near high. No one ever went broke taking a 10% loss. It's best if you consult with a fiduciary advisor to get informed buying & selling decisions
De-risk your portfolios, shore up your core holdings, and take some profits while balancing your portfolio allocations. I’d also suggest you go with a managed portfolio, but even those don’t perform so well, so it’s best you reach out to a proper fiduciary to guide you, that’s what works for my spouse and I. We've made over 80% capital growth minus dividends.
*Sharon Lynne Hart* is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
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Masala bond is a bond issued by foreign entity which, unlike the usual process, is issued in INR and not in Foreign currency (currency of the country of the foreign entity). The major reason for this is that many Indian investors are wary of the foreign exchange volatility risk.
Introduced in 2014, Masala bonds are bonds where investors outside India can participate to fund infrastructure projects of Indian entities or companies. These are issued in Indian currency hence the rupee rate should be strong in order for the investor make money or he/she may bear a loss if it weakens. It offers very high interest rates which in turn increases the foreign investor's confidence in the Indian economy and moreover the capital gains from this rupee denomination are exempted from tax.
Hi Akshay, Masala Bonds are rupee-denominated bonds. It is a debt instrument issued by an Indian entity in foreign markets to raise money, in Indian currency, instead of dollars or local denomination. In 2019, Kerala became the first Indian state to issue Masala Bonds worth Rs. 2,150 crore on the London Stock Exchange. State-owned Kerala Infrastructure Investment Fund Board (KIIFB) had issued the bonds to raise funds in the overseas market.
Masala bonds have real spice in it, with amazing ingredients i.e. 1st things 1st it synergies development, unfolds global investment, stabilize rupee fluctuations along with INR empowerment. In all it culminates into an incredible recipe.🙏
The utility of masala bonds can be viewed from 3 perspectives viz. 1. Investor PoV: Investing in such bonds have higher interest rates as compared to other similar financial instruments which further leads to higher returns. 2. From company PoV: Tax exemption from the interest amounts to be paid to investors + safeguard from rupee depreciation and other such price fluctuations. The aforementioned points make it a strong case for companies to issue such bonds. 3. Government PoV: These bonds allow increasing foreign investments in India in smoother manner which in turn builds confidence of foreign investors in Indian Markets.
Masala bonds are issued outside India but denominated in Indian rupees. It offers higher rates of interest . It helps the foreign investors to get more confidence Indian market . Example. Elephant bond
Masala bonds are debt securities which are INR denominated,issued by eligible entities in India to overseas investors.In other words they are rupee denominated bonds issued to overseas buyers.The term MASALA is to give flavor to the above said bonds.Best part is:CURRENCY RISK IS BORNE BY THE INVESTER.
Hi Akshat, Thanks for the question, it helped me understand (or so I think) a new topic. My view is 1. More forex comes into India as a result of the Masala bond. We are a large economy consuming lot of inports, so our Current account deficit could swell and when forex is coming in, the deficit could be contained 2. Bonds are long term so long term funds come in and so the coubtry can spend on infra projects. That in turn helps economy grow. 3. As an effect of the resultant rupee internationalization, rupee exchange and remittance rates could get lower and therefore our ability to invest in overseas stock markets will improve 4. As a result of steady forex flowing in due to masala bond investments, slide in rupee will be contained or slower Please confirm if I got it right, that itself will be a win if I have!
Hi Akshat, Masala Bonds has assigned a final rating of BB+ this was given by fitch ratings and according to fitch ratings, BB+ is a speculative-grade credit. The major benefit of these bonds is it has a higher rate of returns compared to other bonds. I found an interesting part that borrowers need not worry about rupee depreciation as the issuance of these bonds is in Indian currency rather than foreign currency. Kudos to your dedication! Your attention to detail at work makes you more unique.
My friend I appreciate the time you spend on keeping us updated about the economy, As of Aug, 22nd, 2022. I count on $1,500 what do you suggest me to invest in???🇱🇷
Masala Bond Utilities are ; Working capital to corporate For the development of integrated townships and affordable housing projects In refinancing of rupee loan and non-convertible debentures
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These are Debt Instrument issued outside India to raise Money. And this instruction would be bought only in INR and I believe that might help in INR appreciation.
Masala bonds are debt instrument which helps to fund money in local currency. It can be raise by foreign investors.
It's great that you are talking about bonds, but since you showed the The South Indian Bank bond it would have been better to mention some of them are perpetual. People could jump in without exactly knowing what parameters to look for.
Masala bonds..Interesting✌
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I’ve been diligently working, saving and contributing towards financial freedom and early retirement, but the economy so far since the pandemic has eaten away most of my portfolio, what I want to know is this: Do I keep contributing to my portfolio in these unstable markets or do I look into alternative sectors.
Just try to diversify your portfolio to other market sectors, that way your investment is balanced and you don’t get to make so much losses.
I’m a contractor, and my job doesn’t permit me the time to properly analyze my holdings/evaluate stocks myself, so I’ve had a fiduciary actively restructuring my portfolio for the past 7 years now to match the present market condition and that’s how I’ve been able to stay afloat, knowing when to buy and sell…maybe you should do the same.
How can I reach this adviser of yours? because I'm seeking for a more effective investment approach on my savings
“Sonya lee Mitchell’’ is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I just checked her out and I have sent her an email. I hope she gets back to me soon
I like investing in close-end funds that pay monthly dividends. The trick is to hold long term and reinvest the monthly dividends plus buy more shares on a monthly basis or whenever you can afford to. This can be easily done because close-end funds are bought and sold on the stock market like regular stock. That’d be enough to create a portfolio that would pay you between $50k to $70k in dividend income
The availability of opportunities in the market doesn’t mean you should go in blindly. To understand the potential factors that contribute to your financial growth, I'll advise you to seek the help of a professional
I agree; I have about $1m in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, having a portfolio-advisor for investing is genius!
I find your situation fascinating. Would you be willing to offer a trusted advisor you've worked with?
Her name is “Sharon Marissa Wolfe” . Most likely, the internet should have her basic info, you can research if you like
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
@Anneliese-Carina That's actually quite impressive, I could use some Info on your FA, I am looking to make a change on my finances this year as well
@Anneliese-Carina I will give this a look, thanks a bunch for sharing.
@@sanikura837 be careful with the money you have. Don't invest on the suggestions of comment section.
Democracy is Democrazy India needs a king or queen to prosper imported system favors it's creator😂
I have been a dividend focused investor for a long time. This does not mean I don't own growth stocks, I do. A well rounded portfolio should be a mixture of both categories. One way to minimize the anxiety out of stock market investing, is to make sure you keep a large cash cushion. I invest in the market, but never put all my money in market.
I agree. Based on personal experience working with an investment advisor, I currently have $1m in a well-diversified portfolio that has experienced exponential growth. It's not only about having money to invest in stocks, but you also need to be knowledgeable, persistent, and have strong hands to back it up.
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?.
Sonya lee Mitchell is the licensed manager I use. Just search the name. You’d find necessary details to work with to set up an appointment.
Just ran an online search on her name and came across her websiite; pretty well educated. thank you for sharing.
Great video, One thing I know for a fact Financial Success don't happen overnight, While people like Warren Buffet, Elon Musk, Jeff Bezos all talk about the importance of investing, I've been keen to invest lately, my challenge is knowing when to sell/hold and how to grow profit consistently even in an unsteady market.
It's alright, the average investor struggles with when to sell or hold, as for making consistent profit even during a market crash, your best bet is having a professional guide you.
@stanleyedwin6947 Hey Mate, Really glad to have stumbled on this conversation, which advisor do you use and are you making more than average returns?
@stanleyedwin6947 I just looked her name up out of curiosity and was able to reach her web page on google and email her. I'm hoping she will respond to me shortly. Thank you so much for the tip.
This administration has no idea how people are suffering, things are getting so much harder we can't take it no more. A lot of people are financially struggling to put food on the table and a roof over their head, I appreciate your advice Walter James Henry. Imagine I invested $2,000 and got $10,600.
He's mostly on Telegrams, using the user name
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The process of trading can be complicated when you have limited knowledge.
However, with the right strategy and setups, you can be successful. That's the whole point of investing.
Interesting!! I'm so excited, seeing mr Walter, being mentioned here because his strategies have also normalized winning trades for me. and it's a huge milestone for me looking back to how it all started.
I'm a bit perplexed saying Walter James Henry has been my mentor. Didn't know he has been good to so many people.
Masala bonds - are rupee-denominated bonds as a source of debt financing for the public and private sector in India to raise money from foreign investors.
Utility- Reduces currency - related risks and documentation for the issuers.
And as a result is able to give higher interest rates(approx. 5% more than SBI's base interest rate).
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My first experience with him gave me the assurance that has made me to invest without fear of loosing.
Hi Akshat,
Masala Bonds are bonds issued outside India and denominated in Indian Rupees. The term was used by International Finance Corporation(IFC) to denote Indian Cuisine and Culture. In Masala Bond the investors take the Currency risk.
Is this really a good time to buy stocks? I know everyone says the mrkt is ripe enough for buying but will stocks tank further this year? How long until a full stock recovery? How are other people in this mrkt raking in over $250k gains within months, I'm really just confused at this point.
Why risk is high in real estate?
Do u regret for not buying stocks and the market continues to ripe 😂from 17000 to 24500 nifty
I am 18 y/o. So, I would try to answer this such a way that even a 15 y/o can understand. As the word suggests, "Masala" which is used in food for taste. Similarly, masala bonds gives foreign investors a way to have a taste in investing in India. These are Rupee denominated bonds which means returns or interest paid is calculated in terms of rupees which saves borrower even if rupee gets depreciated. These bonds are low risk and generally used for Affordable housing, working capital for companies, refinancing loans, etc. Also capital gains from these bonds are exempted from taxes.
Thank you Akshat for the Useful and practical Content. Masala Bonds utility in my view are
1. Issuer perspective: Forex risk is negligent (earnings and borrowings in same currency); relatively lower cost of borrowing
2. Investor perspective: relatively higher yield, portfolio/currency diversification, if issued by Govt - sovereign backing, low default risk (relatively better credit rating for India than other economies)
Another option is put it in Liquid fund -> Do SIP in MF regularly -> SWP from MF this way we can make good money beyond 8% as well.
Masala bonds generate a higher interest rate, bring more foreign sum in the country, and also contribute to foreign investment of a country. It can be raised to the ₹ equivalent to USD 50 million in a financial year.
Masala bonds are the bonds issued outside India, by an Indian entity. It is a debt instrument issued by an Indian entity in foreign markets to raise money, in Indian currency, instead of dollars or local denomination.
The major objectives of Masala Bonds are to fund infrastructure projects, ignite internal growth (via borrowings) and internationalize the Indian rupee and helps in building up foreign investors' confidence in the Indian economy.
And Akshat, your explanations are super easy to understand. Feels like getting advice from a super professional. Would be great to see your professional attire as well in coming videos ;) And yes foremost, the glasses. Thanks for sharing the knowledge
Utility of Masala Bonds
Due to rupee depreciation risk (exchange rate risk) Bond Issuer has to pay more amount while redemption, So Masala bonds transfer the currency risk from issuer to borrower, Which ensures the benefit of Indian Issuer
I used to see Crypto as a side thing but it has proven to be a major source of passive income since I venture into it.
I'm thinking of investing in the Crypto market but taking my time to figure out how the whole thing works.
@Eric Scott you're right!
I've been making weekly passive income from crypto for over 5 months tho' I prefer trading with the help of a professional broker because it saves me time and reduces the risk of losing funds in trading as we all know how volatile the market is
crypto is very volatile which is why most successful investors trade with professional brokers.
Reading about people grabbing multi-figures monthly as income in investment even in this crazy days in the market,any pointers on how to make substantial progress in earnings? would be appreciated!
Answer-
1.)Masala bonds was made to add masala(spice up) indian economy by boosting foreign investment in indian currency and to boost infrastructure development.
2.)It also attracts foreign investors as it offers higher rate of interest compared to developed countries.
3.)Generally interest rates of other currencies are lower so helps in issue of higher funds via indian rupee and make it more global.
4.)It will help in the development of domestic bond markets due to competition from overseas investors.
5.)The best part is that even if the indian rupee falls all risk is ith the investor and not ith the issuer which is an indian entity.
TOOK me time to understand and pen down points about utilities of masala bond.
Thank you for making me aware about this topic.
Thanks for your feedback , I will also advise you get a good life by starting to invest , especially on stock market and crypto currency,I will refer you to my trade analyst and financial guru to assist you and make good profits ...
Hope you get the book, your comment is comprehensive and to the point.
@@amvkarthik thanku bro..I tried my best to concise in my own language..but unfortunately didn't get the book 😅still fine got to learn many things
Yes sir
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Hi Akshat,
1. Masala bonds are used in refinancing rupee loans and non-convertible debentures.
2. In real estate activities for the development of integrated townships and affordable housing projects.
3. These bonds provide the working capital to corporate and perform the activities
masala bonds: it is an Indian word for spices, to stimulate the culture and cuisine of India on the international platform. The first Masala bond was issued in 2014 by IFC for the infrastructure projects in India.
Nice info✌
Kerala govt issued their first masala bond in 2016 .
Masala Bonds are rupee-denominated bonds. It is a debt instrument issued by an Indian entity in foreign markets to raise money, in Indian currency, instead of dollars or local denomination.
Utility or benefits:
▪︎ cost of funds is cheaper and is issued below 7% interest rate.
▪︎Do not have to worry about the depreciation of rupee.
▪︎Easy medium to internationalise Indian rupee.
There are some more utility or benefits to masala bond . We need to learn and invest. Thank you sir 😊
Made investing in bonds a lot more easier. Banking websites are never this user friendly when it comes to bond investing. Thank you sir.
Masala bonds - are rupee-denominated bonds as a source of debt financing for the public and private sector in India to raise money from foreign investors.
Utility- Reduces currency - GETS HIGHR RATE OF INTEREST
Hey Akshat, I think the key utilities of Masala Bonds include:
1. Access to Global Capital
2. Currency Risk Mitigation: Since the issuer does not bear the exchange rate risk
3. Interest Rate Advantage
4. International Presence and Reputation
5. Diversification of Investor Base
6. Boosting Foreign Investment
7. The Indian government encourage the issuance of Masala Bonds
8. Promotion of debt in Indian Rupees
So, overall, Masala Bonds offer a strategic financial tool for Indian entities to leverage international capital markets while managing currency risks effectively.
Hi Akshat,
Basic Understanding : Masala Bond is a debt instrument by which an Indian Entity can raise money from Foreign Market, in Indian Currency, instead of local currency or dollars.
Utility of Masala Bond:
1. It allows an Indian company to diversify its funding sources and reduce its borrowing costs by taking advantage of low interest rate in the overseas market as compared to India
2. They also allow an Indian company to tap into global liquidity without incurring currency risk. Since these are rupee-denominated and are ultimately settled in a foreign currency, the currency risk falls on the overseas investor.
3. It helps in building up repo/value/name of INR in International Market, by making it familiar to International Investors.
4. It will also boost the development of domestic bond markets due to competition with overseas market.
Thanks for making your videos interesting by asking these research needed questions.
By the way, where's the Book Club now?
😎✌️
Masala bonds are issued by Indian entities, outside India. These are issued in the local currencies. Benefits for investor are higher interest rates, benefits from rupee appreciation at time of maturity. Benefits of issuer are large audience, cut down in costs and safeguard from any fall in rupee price.
Hello
My self Jagprit singh
As asked utility of "masala bonds"
1. It has made companies either domestic or international easy to borrow money where the interest rate is low.(or from where they can get money in low rates).
2. In one or another way domestic companies management can believe in international markets for money lending .
3. Another key utility for masala bond is that it allows corporates to borrow money with out any pressure as in masala bond the investor has the risk and for a renowned company it becomes easy to raise fund from international market
Masala bonds are such kind of bonds which is issued outside india and expressed it's value in indian ruppees.
Utility of these kind of bonds are-
* It offer higher returns compare to other type of bonds
*The capital gain received out of such bonds are exempted from tax
*It improve and develop the confidence of foreign investors in the indian economy
1. Masala bonds are "Rupee denominated bonds" which were introduced to boost infrastructure development.
2. One can issue bonds worth 50 billion for a maturity period of 3 or 5 years.
For example:
I wanna raise ₹100cr from any foreign country let's say the USA (which will be 14 million USD) and I promise to give ₹110cr with Intrest (which is 15.5 million USD). Here, if the exchange rate of USD to INR fluctuates, let's say it becomes ₹70 to ₹75, then in Masala bond, you don't have to pay the increased price because the price of the bond is already decided by International Finance Corporation which is the broker in World Trade Center. So, here I do not have to pay Rs.116cr ($15.5 million X 75) rather I would pay Rs.110cr ($15.5 million X 70). So, by this system, it creates competition with the Indian bond market. And also saves the company unnecessary expenses.
P.s- Hey Akshat, first of all, a big fan. Hope you like my explanation.
Hemil Shah
MASALA BOND ANSWER :- Hello Sir, I am a permanent resident of Andaman & Nicobar Islands. I am your permanent viewer and never miss your videos. Your presentation is very good and also your English pronunciation also very nice and easy to understand. L learned more knowledge from your videos. Sir keep doing good job. Thanks .
Masala Bonds are rupee-denominated bonds. It is a debt instrument issued by an Indian entity in foreign markets to raise money, in Indian currency, instead of dollars or local denomination.
In 2019, Kerala became the first Indian state to issue Masala Bonds worth Rs. 2,150 crore on the London Stock Exchange. State-owned Kerala Infrastructure Investment Fund Board (KIIFB) had issued the bonds to raise funds in the overseas market.
The video of the thumbnail shows monthly income however the video goes on about how the interest rate we achieve is yearly. This is the second video I am seeing on your channel from which the topic on the video thumbnail is being used to get more views.
Please stay with the content as per written on your video thumbnail.
You can also select monthly if you want
Masala bonds are the bonds issued outside India by an Indian entity in INR.
The major objectives of Masala Bonds are to fund infrastructure projects, ignite internal growth (via borrowings) and internationalise the Indian rupee
In case of any risk, the investor has to bear the loss and not the borrower.
Masala bond is the bbond issued by Indian entities or company issue masalabond outside India to raise money in indian currency
Masala Bonds are bonds issued for people outside India in local currency (i.e rupees).
Benefits:
1. If the rupee appreciates at the time of maturity, it benefits the investor.
2. Increase global investors to invest in Indiain projects.
3. Capital gains are exempted from tax.
Masala bonds are the bonds issued by the Indian entities in the international market for raising funds. It is raised in the rupee currency rather than issuing it in the local currency of the country where it is issued.
The name of the bond i.e. the "masala bond" was given by the International Finance Corporation because India is known for its spices and cuisine.
Hi Akshat,
Honestly speaking, I had no idea about masala bond, I thought it might be related to indian spices. But I read about it and I'm clear about the concept now. Thank you for making us do some research by ourselves as well.
What I understood from my reading is that - When we take a loan internationally and issue bond, it is done in foreign denominated bonds(like dollar/Eur/Pounds). But Masala bonds are Rupee Denominated bonds, so that we can cover our exchange rate risk. For example if I take a loan of 100$ which is 7,505.30 INR for now. Now after 2 years if I have to pay back my loan, and by that time if 1$ has become 100INR, Then I will have to pay around 10,000/-. However, In Rupee Denominated bonds, foreigners have to convert their dollars in rupee. So the exchange rate risk is on lenders. And we need to pay only 7,505.30 INR, without thinking about depreciation value of rupee. Please correct me if I'm wrong somewhere.
Feeling great to learn something new by myself.
@vancity vanlife hi
Utility of Masala Bonds: 1. less documentation
2. lower tax
3. operational convenience
Hai,
I m sasibhushan.
Ans to the question u asked:
Utility of masala bond is to raise funds for specific projects or general corporate purpose,; & these are issued in Indian rupees, by a indian company / government, butcdold to investors outside India.
Utility of Masala bonds is that they are rupee denominated bonds issued by an Indian firm outside of India but the bonds are issued in rupees and the interest and principal are repaid in dollars. Therefore, these bonds could be a game-changer for Indian businesses.
Masala Bonds are rupee-denominated bonds issued outside India by Indian entities. They are debt instruments which help to raise money in local currency from foreign investors. Both the government and private entities can issue these bonds
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Hi Akshat sir ! So, Indian entities or companies issue masala bonds outside India to raise money.
The benefits for the investors are:
1) It offers higher interest rates and thus benefits the investor.
2) It helps in building up foreign investors’ confidence in the Indian economy.
3) It helps strengthen the foreign investments in the country as it facilitates foreign investors’ confidence in Indian currency.
4) The capital gains arising from rupee denomination are exempted from tax.
5) If the rupee appreciates at the time of maturity, it benefits the investor.
The benefits for the borrowers are:
1) It benefits the borrower as there is no currency risk. It saves the borrower from currency fluctuations.
2) Borrowers need not worry about rupee depreciation as the issuance of these bonds is in Indian currency rather than foreign currency.
3) The borrower can mobilise a huge amount of funds.
4) It helps the Indian entity issuing these bonds to diversify their portfolio.
5) It aids borrowers to cut down their cost as they are issued outside India usually below 7% interest rate.
6) As these bonds issuing are in the offshore market, it helps borrowers to tap a large number of investors.
Masala bonds : not for Indians(investment purpose), but for India. Indian organizations raise money from abroad using these. Risk : Rupee denominated, so any rupee fluctuation including prevalent conversion rates affects investor. Advantage : Higher interest rates. Also, confidence in India growth story draws investors into thinking positively about exchange rate w.r.t any other currency.
Hi @Akshat , From my understanding Masala Bonds are the bonds issued by Indian entities in Foreign Markets to raise funds in INR. From borrowers perspective 1) it reduces the cost of raising funds (as borrowing rate in developed economies is less than in India) 2)It also benefit borrowers in mitigating the currency risk (otherwise borrowers have to purchase dollars/euros etc and for that they have to buy them either in spot or in futures and have to hedge their positions). From Investors perspective 1) Even foreign small investors can invest in high yield bonds 2) Diversify their portfolio
The Utility of masala bonds are;
1. It offers higher interest rates and thus benefits the investor.
2. It helps in building up foreign investors’ confidence in the Indian economy.
3. It helps strengthen the foreign investments in the country as it facilitates foreign investors’ confidence in Indian currency.
4. The capital gains arising from rupee denomination are exempted from tax.
5. If the rupee appreciates at the time of maturity, it benefits the investor.
Masala Bonds are rupee-denominated bonds. It is a debt instrument issued by an Indian entity in foreign markets to raise money, in Indian currency, instead of dollars or local denomination.
In 2019, Kerala became the first Indian state to issue Masala Bonds worth Rs. 2,150 crore on the London Stock Exchange. State-owned Kerala Infrastructure Investment Fund Board (KIIFB) had issued the bonds to raise funds in the overseas market.
The utility of masala bonds is that the proceeds would be used to support local currency lending and investment in India
Masala bond:
1. No currency or IR risk for issuer
2. At times there are tax benefit on wht for issuer
3. RBI allows an INR instrument to be refinanced by Masala bond which is not the case in ECB.
Masala bonds are bonds issued by Indian businesses out of India. However, these bonds are issued in Indian currency as against the local currency of the country in which it is offered. To raise funds from overseas investors, Indian companies issue masala bonds outside of India.
Adesh Dhadiwal
Thanks Akshat for explaining about Binds so deeply nicely and minutely so that a layman can also understand 😊👍
Hi Akshat,
The one major point which is missed here is that the "credit rating" agencies have not been doing a good job, rating bonds correctly. Senior Citizen investors may get trapped into buying these bonds( with perceived high ratings) in a high debt, risky enterprises with bad debt/equity ratios.
In a super high liquidity, valuations and growth inflated market such as the one we are in, I wish you explicitly explain the risks involved in believing what we see. ( Rating agencies have literally been useless in rating the securities, their incentives are misaligned)
So, please explicitly highlight the risks involved for a senior citizen investor.
Masala bonds are rupee denominated bonds issued by Indian entity in another country
Utility of Masala Bonds:-
1)The Indian enitity issuing bonds doesn't have to worry about depriciation of Rupee value
2)Listing in any stock exchange will increase the liquidity
3)Increases foreign Investment as it provide high interest rates
4)Helps in diversifying the borrowings
5)FPI increases
6) The capital gains arising from rupee denomination are exempted from tax.
7)INR tradebale ranking improves
8)Forex reserve of the country increases as the person investing has to convert his local currency to INR
9) INR gets stronger
There is no doubt that you will rise fast at the apex of your career. Because you are a very intelligent, smart, hard worker and your work ethic par excellence keep going nice team
Masala Bonds is a debt instrument issued by an Indian entity in foreign markets to raise money, in Indian currency, instead of dollars or local currency
Example :- Kerala issue Masala Bonds on the London Stock Exchange. But instead taking money in pound they take in Indian rupees.
It's help to dominate INR in global and internationalise Indian rupee by making it familiar to the International investors market.
companies issuing these bonds do not have to worry about the depreciation of rupee.
It's also need less paper as the registration does not have to be made as FPI in India
Masala bonds: used to bring investment from foreign in India.
1) Interest given in Indian currency. So, investor benefits if Indian economy prosper as rupees gets stronger and vice versa.
2) Prominent companies which are leaders in Indian economies growth like hdfc Bank, yes bank, irfc (doosra itc ;) have raised money from it. Thus, it is safer from that perspective, and also these binds have good ratings bt credit rating agencies making them safe to invest
3) Provides high interest rates as risk is more for the investor (if rupees gets depreciated he is one bearing the loss)
4) currently, Indian economic is considered as the most lucrative investment opportunities due to:"
I) China +1 strategy.
ii) and also expansion of organised sector, middle case the same way China prospered a while ago.
Hope these answers gets selected by you.
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Thanks.
Thanks,
Nicely elaborated.
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The name Masala bond was given by the International financial corporation IFC, Masala means spices in hindi. It would stimulate Indian culture in international platform.
Masala bonds are debt instruments issued by Indian entity, outside India, in Indian currency.
They are rupee dominated bonds. Meaning funds will be raised from overseas market in Indian rupees.
Mainly used for infrastructure development and estate planning.
Maturity period depends on amount of money raised in a single financial year.
If amount raised by bond is upto rupee equal to USD 50 million then maturity period is 3yrs and if amount raised in 1 financial year is rupee equivalent to more than USD 50 million then the maturity period is 5 yrs
In case of any risk , it is born by investor and not the borrower.
Main benefit is that capital gains from rupees appreciation are exempted from tax.
Masala Bonds
1) Debt instrument
2) to raise money from outside India from foreign investors
3) Rupee dominated in local currency
4) Masala name given to maintain its uniqueness
Masala bonds started in 2014 by IFC to raise infrastructural funds from domestic as well as foreign clients. Traded in INR only
Hi Akshat!
-Masala bonds are issued outside India to make foreign investors to invest on it, through Indian rupees rather than their local currency.
-And also gives them a confidence by providing higher interest rates to the investors.
-The name 'Masala bond' is used by the IFC.
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Masala bonds are bonds you inherent or buy when you get the chat kara from eating masala. While your source of chatkara might vary, the growth and the volatility depends on MDH uncle.
Your smile explains everything when you were talking about the third option that is investing in stocks...
Hay Akshat, Masala bond are debt instruments which help to raise money in local currency from foreign investors. For example NTPC issued 2000cr masala bond on 2017
Q1
Kerala government has also did the same, during mr thomas issac tenure.
Ya bro Q1 Apr 2017
The economic crash 2008 happened because of CDO bonds which was AAA rated.
Turns out credit rating is influenced by banks.
Since these bonds are issued outside of India, they are settled in US dollars (USD). The unique feature of masala bonds is that Rupee currency risk is borne by bond investors instead of bond issuers as it would be if an Indian bank or corporate were to issue in a foreign currency.
Masala bonds are bonds issued outside indian in rupee denomination by an Indian entity in order to raise money.
Utility- They offer higher interest rate to offshore investors as in developed countries interest rates are low
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Agree
Hi Akshat,
Masala bonds are essentially a debt instrument but relatively more secure. It does have the disadvantages of currency fluctuations associated with it but there are also some tax benefits associated with currency appreciation, if that happens.
"Masala" bonds:
What?
- Debt raised by Indian companies + govt, targeted for foreign investors.
Why?
- In Indian currency denomination (country + currency risk exposure) offering higher rate of interest than developed countries.
Why now?
- A thriving opportunity wrt infrastructure and development in India, perfect time for investing in the largest middle class young economy.
Thanks for watching☝️☝️
☑️
Don't forget to hit the button for consultation and investment advice..on how to invest....?✅.
Masala bonds- bonds issued outside of India but are traded in INR which protects investors from taking risk of currency change.
Masala Bonds
1. The investors will directly take the currency risk as the bonds are in Indian currency.
2. If at all the Indian currency falls. The foreign investors have to face loses.
3. Cost of borrowing will be less than domestic markets.
4. Internationalization of Indian rupees can be promoted by masala bonds.
5. Good way to attract foreign capital.
Hi Akshat, even though every body has already written the utility, I think by incentivising the efforts for finding the answer, you made some thousands of people read about the Masala Bonds and that is productive in my viewpoint.
I also read about the same, so just noting down one two super important points in my viewpoints:-
- Practically speaking, the currency depreciation is borne by investors. So the investments will be from such people who believe in growth story of India. Obviously it gives benefits to the borrower.
- Emotionally thinking, it creates awareness of India spices and cuisines in foriegn world. The exports of Indian Spices have been growing at good rate. There are various factors responsible but just making a random, quite illogical analogy.
Masala bonds basically mean a rupee-denominated bond that is when an Indian company issues a bond in the overseas market that is rupee-denominated then it is a masala bond. As it is rupee denominated it is shielded against the currency exchange rate changes. So the risk of rupee depreciation gets transferred to the foreign investor. This type of bond helps to internationalize the Indian rupee and also helps the Indian companies to diversify their funding resources. Also, this bond will support the stability of the Indian rupee.
study iq?
Capital gain of Rs. 8.50 lakh from house property sale. Should I invest in NHAI or REC bonds @5% with lock in period of 5 years OR can i invest in this amount in Shares, Mutual funds, commodities , gold which is better optioin
Masala Bonds are rupee-denominated bonds issued outside India by Indian entities. They are debt instruments which help to raise money in local currency from foreign investors. Advantages (investors): high interest rates, capital gains-tax free, benefit when rupee appreciates. Advantages(borrower): no currency risk, can be floated at lower interest rates as they are floated outside india
There are lot of utilities, some of them are listed below :-
1. These are rupee denominated bond so it's complete hedge against the exchange rate fluctuation hence variable on this account is freezed.
2. Mostly it's a perpetual in case of Bank raising this ,hence it is not as debt but treated as equity.
3. Mostly it is used as working capital by Company.
4. It is also used as refinancing option of debt in dollar and payment to debentures..
Many more...
How those this whole thing work , I'm interested in it and willing and ready to invest heavily but I need assistance to properly guide me through on how to make good start up and to be successful
My
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Masala Bond is comparatively safer instrument and can generate regular returns at higher rates than FD.
Masala bond is a bond issued by foreign entity which, unlike the usual process, is issued in INR and not in Foreign currency (currency of the country of the foreign entity). The major reason for this is that many Indian investors are wary of the foreign exchange volatility risk.
Introduced in 2014, Masala bonds are bonds where investors outside India can participate to fund infrastructure projects of Indian entities or companies.
These are issued in Indian currency hence the rupee rate should be strong in order for the investor make money or he/she may bear a loss if it weakens.
It offers very high interest rates which in turn increases the foreign investor's confidence in the Indian economy and moreover the capital gains from this rupee denomination are exempted from tax.
Hi Akshay,
Masala Bonds are rupee-denominated bonds. It is a debt instrument issued by an Indian entity in foreign markets to raise money, in Indian currency, instead of dollars or local denomination.
In 2019, Kerala became the first Indian state to issue Masala Bonds worth Rs. 2,150 crore on the London Stock Exchange. State-owned Kerala Infrastructure Investment Fund Board (KIIFB) had issued the bonds to raise funds in the overseas market.
NAKKU 🤧🤧
Masala bonds have real spice in it, with amazing ingredients i.e. 1st things 1st it synergies development, unfolds global investment, stabilize rupee fluctuations along with INR empowerment. In all it culminates into an incredible recipe.🙏
masala bonds are debt instruments which basically help to raise money in local currency from foreign investors
The utility of masala bonds can be viewed from 3 perspectives viz.
1. Investor PoV:
Investing in such bonds have higher interest rates as compared to other similar financial instruments which further leads to higher returns.
2. From company PoV:
Tax exemption from the interest amounts to be paid to investors + safeguard from rupee depreciation and other such price fluctuations. The aforementioned points make it a strong case for companies to issue such bonds.
3. Government PoV:
These bonds allow increasing foreign investments in India in smoother manner which in turn builds confidence of foreign investors in Indian Markets.
Hi Akshat , great explanation 🎉
plz also tell us is entry n exit in bonds tax free by any chance or would it attract tax just like fd ?
nice vid! keep making similar content!
Masala bonds are issued outside India but denominated in Indian rupees. It offers higher rates of interest . It helps the foreign investors to get more confidence Indian market . Example. Elephant bond
Masala bonds are debt securities which are INR denominated,issued by eligible entities in India to overseas investors.In other words they are rupee denominated bonds issued to overseas buyers.The term MASALA is to give flavor to the above said bonds.Best part is:CURRENCY RISK IS BORNE BY THE INVESTER.
Hi Akshat, Thanks for the question, it helped me understand (or so I think) a new topic. My view is
1. More forex comes into India as a result of the Masala bond. We are a large economy consuming lot of inports, so our Current account deficit could swell and when forex is coming in, the deficit could be contained
2. Bonds are long term so long term funds come in and so the coubtry can spend on infra projects. That in turn helps economy grow.
3. As an effect of the resultant rupee internationalization, rupee exchange and remittance rates could get lower and therefore our ability to invest in overseas stock markets will improve
4. As a result of steady forex flowing in due to masala bond investments, slide in rupee will be contained or slower
Please confirm if I got it right, that itself will be a win if I have!
Hi Akshat,
Masala Bonds has assigned a final rating of BB+ this was given by fitch ratings and according to fitch ratings, BB+ is a speculative-grade credit. The major benefit of these bonds is it has a higher rate of returns compared to other bonds. I found an interesting part that borrowers need not worry about rupee depreciation as the issuance of these bonds is in Indian currency rather than foreign currency.
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Masala Bond Utilities are ;
Working capital to corporate
For the development of integrated townships and affordable housing projects
In refinancing of rupee loan and non-convertible debentures
Awesome information .... Thank you so much Akshat .
But you didn't mention how much tax implications will there be for bonds compared to FD.
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