Grip, an alternative investment platform, is expanding its portfolio by introducing the third tranche of Securitised Debt Instruments (SDIs). Through the SDI issuances, Grip will enable individual investors to earn monthly rental income through similar operating lease contracts entered with identified lessees.

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For the uninitiated, SDIs are fixed-return investment instruments introduced by Sebi in 2008.

How is Grip’s latest SDI tranche different from the first issuance?

Grip’s latest tranche offering is an investment-grade one rated by CRISIL, unlike the first SDI tranche.

However, unlike the previous tranches, which were backed by a pool of four lessees and diversified across industries, this offering has been backed by a single CRISIL-rated lessee, said Nikhil Aggarwal, Founder & CEO at Grip.

How will it benefit retail investors?

Retail investors are often hard-pressed to find investment options covering the entire risk-reward spectrum and invest predominantly in instruments such as FDs, which offer low yields. The corporate bond market has yet to become deeper and offers products targeted to retail investors.

"We launched the third SDI offering as our debut investment-grade offering backed by corporate credit of the largest fleet operator of cars on Uber's India platform," Aggarwal said.

"Today, retail investors are dealing with many hurdles during the investment due to high inflation and volatile stock markets, to name a few. High inflation, unfortunately, reduces the real value of returns. When the rate of inflation exceeds the rate of return, it spells trouble for investors as the money invested continues to lose its purchasing power over the investment period. As the interest on fixed-return instruments – like fixed deposit (FD), recurring deposit (RD), taxable bonds etc. – is generally taxable, people investing in such instruments suffer even more after the tax outgo brings the returns further down," he said.

SDIs can be helpful here.

What will be the total amount aggregated, the expected YTM time, and the expected returns?

As per Aggarwal, they have aggregated over Rs 25 crore in investments in the SDI products, including this tranche. The SDI is a CRISIL-rated investment-grade instrument listed on NSE and offered in line with SEBI regulations.

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The new SDI opportunity enabled Rs 8+ crore in investments in less than

How does SDI stay safe from market volatility?

The SDI instrument is not only completely insulated from stock market volatility and conditions but also falls into the fixed-income debt category with contracted monthly EMI-style repayments from operating lease transactions with identified lessees.

"This allows investors to buy high-yielding corporate credit from their favourite start-ups in an NSE-listed tradable instrument - similar to buying and selling a stock! Unlike a debt MF, where the investors depend upon the fund manager to identify the debtors and yields can vary, investors can decide upfront if the debtors are acceptable and target a fixed return," Aggarwal said.

Additionally, SDI is quite distinctive from the run-of-the-mill debt investment options like corporate NCDs as most such debt investment options return capital only at the end of the tenure, and investors are on the hook for the entire tenure, i.e. payback period is equal to the full term of the NCD.

In the case of SDI, however, 40-45 percent of the capital gets returned every year, and the investment keeps getting de-risked as the tenure passes. The payback period is about 66 percent of the tenure of the transaction, Aggarwal told CNBC-TV18.com.

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