Non Convertible Debentures

 

What is Non Convertible Debentures ?

Non-Convertible Debentures (NCDs): Corporate fixed-income tools for steady returns. Get regular interest + principal at maturity—no equity conversion. Beats bank FDs; check ratings for safety.

Example 

Invest ₹1,00,000 in an NCD at 9% for 3 years: Earn ₹9,000/year interest, get ₹1,00,000 back at end. Ongoing 2026 issues include XXXShares (maturity Dec 2026) and YYY at 9.6% (AA-rated)

Security Structure

Divided into secured (asset-backed, like property or machinery as collateral) and unsecured (trust-based on issuer credit). Secured NCDs rank higher in repayment priority during defaults.

Issuance Features

Issued via public offers or private placement, listed on exchanges (NSE/BSE) for tradability. Features cover credit ratings (e.g., AAA safest), interest payout frequency (monthly/quarterly), and call/put options (early redemption rights).

Eligibility to invest in Non-Convertible Debentures (NCDs) in India is categorized by SEBI guidelines into three main investor classes, ensuring broad access while protecting retail participants.

Category I: Institutions

Public financial institutions, banks (commercial/co-operative), provident/pension funds, insurance companies, mutual funds, and SEBI-registered venture capital/alternative investment funds can invest without limits.

Category II: Non-Institutions

Companies, registered societies/bodies corporate, public/private charitable trusts (if authorized by trust deed), partnership firms (in partners' names), and LLPs qualify here.

Category III: Individuals

Resident Indians and Hindu Undivided Families (HUFs) via Karta; NRIs may invest on non-repatriation basis if the issuer allows (check prospectus, as US-based NRIs often restricted)

Ineligible Investors

Foreign nationals, FPIs, OCIs (except permitted NRIs), minors, and those ineligible under statutory rules cannot participate.

Does Rating matter ?

Mandatory by SEBI, ratings from agencies like CRISIL, ICRA, or CARE signal default risk—AAA offers highest safety/lowest risk, while BB or below indicates high default potential. Higher ratings mean safer investments but lower yields; they guide better decisions and assure repayment reliability.

Rating Scale Overview

Ratings range from AAA (safest) to D (default), with modifiers (+/-) for finer gradations within categories like AA or A.

Essential Health Insurance Add-Ons to Maximize Your Protection

 

Choosing the right health insurance is only the beginning—adding smart riders or add-ons can give your policy an extra edge. Here’s what every policyholder should know about the most valuable add-ons available today:

1. Critical Illness Cover
This is one of the most sought-after health insurance add-ons. If you are diagnosed with a serious illness such as cancer, heart attack, stroke, kidney failure, or need major surgery, a critical illness cover offers a lump-sum payout. This support helps you handle the steep costs of treatment and recovery, and cushions your finances if you’re unable to work during your illness.

2. Hospital Cash Benefit
Hospitalization can bring unexpected daily expenses, from meals to caregiver support to transport. With the hospital cash add-on, you receive a fixed daily allowance for every day of hospitalization, regardless of the medical bill amount. This benefit is especially useful for self-employed individuals or daily wage earners who rely on regular income.

3. Room Rent Cover
Most basic health policies set a daily room rent limit, restricting your choice of hospital rooms. The room rent cover add-on removes these limits, letting you choose better facilities—be it a private or deluxe room—without worrying about claim rejection or additional costs. Enjoy comfort and peace of mind during your hospital stay.

4. No-Claim Bonus (NCB) Protection
A no-claim bonus gives you a reward—usually a premium discount or increased sum insured—for every claim-free year. With NCB Protection, your bonus stays intact even if you make a claim during the policy year. This add-on helps keep your premium low and ensures you’re rewarded for overall good health.

5. Personal Accident Cover
Life is unpredictable. The personal accident cover is designed to provide financial security if an accident results in death or permanent disability. This add-on pays a lump sum to support your family and cover expenses during tough times, making it ideal for those with active lifestyles or frequent travellers.

6. Consumable Cover
Hospitalization costs often go beyond doctor fees and medicines—items like masks, gloves, syringes, PPE kits, and other consumables can add up. Consumable cover takes care of these out-of-pocket expenses, providing truly comprehensive protection that extends to every part of your hospital bill.

7. Inflation Shield
Medical expenses are constantly rising. An inflation shield automatically increases your base sum insured every year, helping your coverage keep pace with medical inflation. This means you won’t be caught off guard by higher treatment costs in the future.

8. Home Care Treatment
Sometimes, treatment needs to happen at home instead of the hospital. The home care treatment add-on covers medical expenses for home-based care, as prescribed by your doctor. It’s a convenient and cost-effective way to ensure your health needs are met without sacrificing insurance benefits.

Choose Wisely for Complete Protection
The right add-ons can make your health insurance truly comprehensive. Assess your lifestyle, income stability, and healthcare priorities to select the riders that best fit your needs. By customizing your policy with these add-ons, you can ensure financial stability and receive the best possible care whenever you need it.

Fire Insurance and its benefits

 Fire Insurance is a type of insurance policy that provides financial protection against damage or loss of property caused by fire. This policy helps individuals or businesses recover the financial losses incurred due to fire-related incidents. It typically covers the cost of repairing or replacing damaged property, including buildings, contents, and in some cases, business interruptions.

Benefits of Fire Insurance:

Financial Protection: Fire insurance offers significant financial security in case of damage to property caused by fire. This helps the policyholder avoid the burden of bearing the entire cost of repairs or reconstruction.

Peace of Mind: Knowing that you have coverage for fire-related risks gives you peace of mind. It reduces the stress of potential financial devastation in case a fire happens, especially when dealing with expensive assets.

Business Continuity: For businesses, fire insurance ensures that operations can continue, even if a fire disrupts the business temporarily. Some policies may include business interruption coverage, which compensates for the loss of income during downtime.

Comprehensive Coverage: Many fire insurance policies offer comprehensive coverage, which not only includes fire-related damage but also other perils like lightning, explosions, or even smoke damage, depending on the policy terms.

Protection for Property and Assets: Fire insurance provides protection for both residential and commercial properties, including buildings, furniture, machinery, inventory, and other assets that may be damaged by fire.

Loan Security: In case a property is mortgaged, lenders often require fire insurance to safeguard their interests. This ensures that the property can be rebuilt or repaired if damaged by fire, protecting the loan.

Cost-Effective Premiums: Fire insurance premiums are typically affordable, especially when considering the potentially high cost of replacing or repairing fire-damaged assets. The cost of premiums can vary based on factors such as property type, location, and coverage level.

Legal and Regulatory Compliance: In some regions or situations, having fire insurance is a legal requirement, especially for businesses or properties in high-risk fire zones. It ensures compliance with local regulations.

Types of Fire Insurance Policies:

Standard Fire and Special Perils Policy: Covers loss or damage due to fire, lightning, explosion, and other specified perils like riots or civil commotion.

Comprehensive Fire Insurance: Provides a wider scope of coverage, which might include damages caused by fire, natural disasters, and other calamities.

Loss of Profit Insurance: Provides compensation for the loss of business income if the business is interrupted due to fire damage.

Valued Policy: This policy ensures that the insured amount is agreed upon beforehand and paid in full in case of fire damage, regardless of the actual damage incurred.

Overall, fire insurance is essential for safeguarding your property and assets against fire-related risks, offering peace of mind and financial protection in the face of unforeseen events.

What is Alpha and Beta

 

What Is Beta?

Beta is the volatility of a security or portfolio against its benchmark. It's a numerical value that signifies how much a stock price jumps around. The higher the value, the more the company tends to fluctuate in value. Beta measures of systematic risk. It can’t be transferred but hedged
 
What Is Alpha?

Alpha is a term used in investing to describe an investment strategy's ability to beat the market Index , Alpha is thus also often referred to as  excess return or  abnormal rate of return in relation to a benchmark, when adjusted for risk.  Alpha is called  Unsystematic risk.

Understanding Beta in Investing. 

How should investors assess  risk in the stocks that they buy or sell? While the concept of risk is hard to factor in stock analysis and valuation, one of the most popular indicators is a statistical measure called beta.
Beta measures risk in the form of volatility against a benchmark and is based on the principle that higher risk come with higher potential rewards. Analysts use beta when they want to determine a stock's risk profile. High beta Stock which generally means any stock with a beta higher than 1.0, are supposed to be riskier but provide higher return potential; low-beta stocks, those with a beta under 1.0, pose less risk but also usually lower returns 2



Understanding Alpha in Investing.

Alpha is one of five popular technical investment. The others are beta, standard deviation  R square, & the sharpe ratio. These are all statistical measurements used in  modern portfolio theory. All of these indicators are intended to help investors determine the risk-return profile of an investment.
 
Active portfolio managers seek to generate alpha in diversified portfolios, with diversification intended to eliminate unsystematic risk. Because alpha represents the performance of a portfolio relative to a benchmark, it is often considered to represent the value that a portfolio manager adds to or subtracts from a fund's return.

ETF Exchange Traded Fund

WAT IS AN ETF?    
 What is an ETF
An ETF, or exchange traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund.
In short ETFs are funds that track indexes such as CNX Nifty or BSE Sensex, etc. When you buy shares/units of an ETF, you are buying shares/units of a portfolio that tracks teh yield & return of its native index. Teh main difference between ETFs and other types of index funds is that ETFs don't try to outperform their corresponding index, but simply replicate teh performance of teh Index. They don't try to beat teh market, they try to be teh market.
The trading value of an ETF is based on the net asset value of the underlying stocks that an ETF represents. ETFs typically has higher daily liquidity and lower fees, making them an attractive alternative for individual investors.

Passive Management
ETFs are passively managed. The purpose of an ETF is to match a particular market index, leading to a fund management style known as passive management. Passive management is the chief distinguishing feature of ETFs, and it brings a number of advantages for investors in index funds. Essentially, passive management means the fund manager makes only minor, periodic adjustments to keep the fund in line wif its index. An investor in an ETF do not want fund managers to manage their money He  decide’s which stocks to buy/sell/ hold), but simply want the returns to mimic those from the benchmark index. Since buying all scrips that are part of say, the Nifty (which TEMPhas 50 scripts) is not possible, one could invest in an ETF that tracks Nifty.
dis is quite different from an actively managed fund, like most mutual funds, where the fund manager ‘actively’ manages the fund and continually trades assets in an effort to outperform the market.
coz they are tied to a particular index, ETFs tend to cover a discrete number of stocks, as opposed to a mutual fund whose scope of investment is subject to continual change. For these reasons, ETFs mitigate teh element of "managerial risk" that can make choosing teh right fund difficult. Rather TEMPthan investing in an ‘active’ fund managed by a fund manager, when you buy shares of an ETF you're harnessing teh power of teh market itself.

ETFs are cost-efficient
coz an ETF tracks an index wifout trying to outperform it, it incurs lower administrative costs than actively managed portfolios. Typical ETF administrative costs are lower than an actively managed fund, coming in less than 0.20% per annum, as opposed to teh over 1% yearly cost of some actively managed mutual fund schemes. coz they have lower expense ratio, there are fewer recurring costs to diminish ETF returns.
 
While the Expense Ratio of ETFs is lower, their are certain costs that are unique to ETFs. Since ETFs are bought traded on stock exchange through a stock broker, every time an investor makes a purchase or sale, he/she pays a brokerage for the transaction . In addition, an investor may also incur STT and the usual costs of trading in stocks, including differences in the ask-bid spread etc. Of course, traditional Mutual Fund investors are also subjected to the same trading costs indirectly, as the Fund in turn pays for these costs.
Flexibility of ETFs

ETF shares trade exactly like stocks. Unlike index funds, which are priced only after market closings, ETFs are priced and traded continuously throughout teh trading day. They can be bought on margin, sold short, or held for teh long-term, exactly like common stock.
Yet because their value is based on an underlying index scrips, ETFs enjoy teh additional benefits of broader diversification than shares in single companies, as well as wat many investors perceive as teh greater flexibility that goes with investing in entire markets, sectors, regions, or asset types. Because they represent baskets of stocks, ETFs typically trade at much higher volumes than individual stocks. High trading volumes mean high liquidity, enabling investors to get into and out of investment positions with minimum risk and expense.

No. Any asset class that TEMPhas a published index and is liquid enough to be traded daily can be made into an ETF. Bonds, real estate, commodities, currencies, and multi-asset funds are all available in an ETF format. For instance, Mutual Funds in India offer Gold ETFs, where teh underlying investment is in physical gold.

ETFs can either be purchased on teh exchange or directly from teh Fund. Teh Fund creates / redeems units only in predefined lot sizes in exchange for a predefined underlying portfolio basket (called “creation unit”). Once teh underlying portfolio basket is deposited with teh Fund together with a cash component, teh investor is allotted teh units.
dis is in-kind creation / redemption of units, unique to ETFs. Alternatively, investors can follow teh "Cash Subscription" route in which they can pay cash directly to teh Fund for purchasing teh underlying portfolio in creation units size.
 
 
ETFs have a very transparent portfolio holding and predefined creation basket. dis allows arbitrageurs to create and redeem units every day through teh in-kind creation / redemption mechanism. Such arbitrageurs are always in teh market to take advantage of any significant premium or discount between teh ETF market price and its NAV by doing arbitrage between teh ETF and its underlying portfolio. Thus, teh open architecture of ETFs ensures that there is no significant premium or discount to NAV. At teh same time, additional demand / supply is absorbed due to teh action of teh arbitrageurs.
While both are passively managed, teh biggest difference is that Index Funds operate in teh way all mutual funds do, in that they are priced at teh close of teh trading day based on teh NAV of teh underlying securities, whereas ETFs are priced to teh market throughout teh trading day. That means they are easier to buy and sell quickly, if need be. Secondly, ETFs are available only on stock exchanges. Hence, you need a demat account to invest in an ETF, whereas for an Index Fund, you don’t need a demat account and you may buy or sell teh Units of an Index Fund directly from teh mutual fund in small amounts.

ETFs combine the range of a diversified portfolio with the simplicity of trading a single stock. Investors can purchase ETF shares on margin, short sell shares, or hold for the long term. ETFs can be bought / sold easily like any other stock on the exchange through terminals across the country.
Asset Allocation: Managing asset allocation can be difficult for individual investors given the costs and assets required to achieve proper levels of diversification. ETFs provide investors with exposure to broad segments of the equity markets. They cover a range of style and size spectrums, enabling investors to build customized investment portfolios consistent with their financial needs, risk tolerance, and investment horizon. Both institutional and individual investors use ETFs to conveniently, efficiently, and cost TEMPeffectively allocate their assets.

Cash Equitisation:
Investors typically seek exposure to equity markets, but often need time to make investment decisions. ETFs provide a "Parking Place" for cash that is designated for equity investment. Because ETFs are liquid, investors can participate in teh market while deciding where to invest teh funds for teh longer-term, thus avoiding potential opportunity costs. Historically, investors has relied heavily on derivatives to achieve temporary exposure. However, derivatives are not always a practical solution. Teh large denomination of most derivative contracts can preclude investors, both institutional and individual, from using them to gain market exposure. In dis case and in those where derivative use may be restricted, ETFs are a practical alternative.
Hedging Risks:
ETFs are an excellent hedging vehicle coz they can be borrowed and sold short. Teh smaller denominations in which ETFs trade relative to most derivative contracts provides a more accurate risk exposure match, particularly for small investment portfolios.
Arbitrage (cash vs futures) and covered option strategies:
ETFs can be used to arbitrage between the cash and futures market, as they are very easy to trade. ETFs can also be used for cover option strategies on the index.
 

Courtesy Amfi India

T-Bills (Treasury Bills )

 

What are Treasury Bills?

 

T-Bills are also called Zero Coupons. It’s a debt paper which was first introduced in 1917(Imperial Bank) RBI came into existence in 1949.  T-Bills don’t pay any interest, T Bills has a tenure of less then a year. T Bills are sold at a discount to make it attractive & are sold through auction RBI. Tenure is 91days 182days & 364 days Over here the government wish to borrow from Residential India’s for repayment of Interest or other financial obligation. Take for example ₹100 T-bill shall be auctioned to public at ₹ 96 at the time of the maturity (e.g. 91 days/182days &364days) you shall get ₹ 100 In short, your yield is ₹4. Short term capital gain shall be applicable depending on your tax bracket.

 

 

Where you can buy T Bill’s and how

T Bills are also called short term debt instruments issued by the Government of India you can get it through auction. RBI You may bid for T-bills non-competitively or competitively, but not both, for the same auction RBI/Retail In order to book one has to have a Demat account, trading account & trading platform. Any Leading banking or broking firm can be of assistance if you fulfil all the above condition.

 

What are the advantages of T Bills?

T Bili’s are backed by Government of India. It has never defaulted till this date. You can keep it as collateral against securities. You can sell in the secondary market and make profit..   

 

 

What is the difference between T Bills and Corporate/ Sovereign Bond?

T-bills are short-term, low-risk, low-return debt securities, while sovereign bonds have longer maturities, offer higher returns, but come with a higher risk of default. Investors should carefully consider their investment objectives and risk tolerance before choosing between T-bills and sovereign bonds.

 

 

Derivatives (Future & options)

 What is Financial Instrument?

 

Financial instruments are assets that can be traded, Most types of financial instruments provide efficient flow and transfer of capital asset  all throughout Investor’s(Like you and me) assets can be in the form of cash, a contractual(Agreement/Accord) right to deliver or receive cash or another type of financial instrument, or evidence of one’s ownership in some entity.

Examples of financial instruments include security, exchange-traded funds (ETFs), bonds, certificates of deposit (CDs), mutual funds, loans, and derivatives contracts, among others.

 

Understanding Financial Instrument:

 

Financial instruments can be real or virtual documents representing a legal agreement involving any kind of monetary value. Equity-based financial instruments represent ownership of an asset. Debt-based financial instruments represent a mortgage/loan made by an investor to the owner of the asset.

 

 

Types of Financial Instrument

 

Financial instruments may be divided into two types: cash instruments & derivative instruments.

 

Cash Instruments

 

The values of cash instruments are directly influenced and determined by the markets. These can be securities that  are easily transferable. Securities and bonds are common examples of such instruments.

 

Cash instruments may also be deposits and loans agreed upon by borrowers an lender Banker’s/Personal Cheque are an example of a cash instrument because they transmit payment from one bank account to another (negotiable instruments)

 

Derivative Instruments

 

The value and characteristics of derivative instruments are based on the vehicle’s underlying components, such as assets, interest rates, or indices.

An equity options contract—such as a call option on a particular stock, for example— A Future is a contract to buy or sell an underlying stock or other asset at a pre-determined price on a specific date. On the other hand, Options contract gives an opportunity to the investor the right but not the obligation to buy or sell the assets at a specific price on a specific date, known as the expiry date.

 

there can be over-the-counter (OTC) derivatives or exchange-traded derivatives. OTC is a market or process whereby securities—which are not listed on formal exchanges—are priced and traded.

 

Types of asset class of Financial Instruments

 

Financial instruments may also be divided according to an asset class, which depends on whether they are debt-based or equity-based.

 

Debt-Based Financial Instruments

Short-term debt-based financial instruments last for one year or less. Securities of this kind come in the form of Treasury bills (T-bills) and commercial paper. Bank deposits and certificates of deposit (CDs) are also technically debt-based instruments that credit depositors with interest payments.

Exchange-traded derivatives exist for short-term, debt-based financial instruments, such as short-dated interest rate futures. OTC derivatives also exist, such as forward rate agreements (FRAs).

 

Long-term debt-based financial instruments last for more than a year. Long-term debt securities are typically issued as bonds or mortgage-backed securities (MBS). Exchange-traded derivatives on these instruments are traded in the form of fixed-income futures and options. OTC derivatives on long-term debts include interest rate swaps, interest rate caps and floors, and long-dated interest rate options.

 

Equity-Based Financial Instruments

 

Securities that trade under the banner of equity-based financial instruments are most often securities, which can be either common stock or preferred shares. ETFs and mutual funds may also be equity-based instruments.

 

Exchange-traded derivatives in dis category include stock options and equity futures.

 

Foreign Exchange Instruments

Foreign exchange (forex, or FX) instruments include derivatives such as forwards, futures, and options on currency pairs, as well as contracts for difference (CFDs). Currency swaps are another common form of forex instrument. In addition, forex traders may engage in spot transactions for the immediate conversion of one currency into another.

 

Wat are some examples of financial instruments?

 

Financial instruments come in many forms and types. Wat makes them financial instruments is that they confer a financial obligation or right to the holder. Common examples of financial instruments include stocks, exchange-traded funds (ETFs), mutual funds, real estate investment trusts (REITs), bonds, derivatives contracts (such as options, futures, and swaps), checks, certificates of deposit (CDs), bank deposits, and loans.

 

Are commodities financial instruments?

While commodities themselves, such as precious metals, energy products, raw materials, or agricultural products, are traded on global markets, they do not typically meet the definition of a financial instrument. That is because they do not confer a claim or obligation over something else. However, commodities derivatives, such as futures, forwards, and options contracts that use a commodity as the underlying asset, would be a financial instrument.

 

Are insurance policies financial instruments?

An insurance policy is a legally binding contract established with the insurance company and policy owner that provides monetary benefits if certain conditions are met (e.g., death in the case of life insurance). If the insurer is a mutual company, the policy may also confer ownership and a claim to dividends. Insurance policies also has a specified value in terms of both the death benefit and living benefits (e.g., cash value) for permanent policies.

While insurance policies are not considered securities, one could possibility view them as an alternative type of financial instrument because they confer a claim and certain rights to the policyholder and obligations to the insurer.

 Courtesy Investopedia's