Sanjay Kaul appointed MD and CEO of GIFT City, Gandhinagar
Currently, Kaul is on central deputation performing duties as joint secretary in the Union Ministry of Culture, handling portfolios like international cultural relations, UNESCO and Intangible Cultural Heritage, Library & Schemes and The Asiatic Society & Maulana Abul Kalam Azad Institute of Asian Studies.
As per the GAD notification, Kaul will be on deputation at GIFT City from the date of assumption of charge of the post, for a period of three years or until further orders.
Sanjay Kaul has earlier worked in Gujarat on deputation as the managing director of the Tourism Corporation of Gujarat Limited and Gujarat Informatics Limited.
The outgoing MD and CEO of GIFT City Company Limited, Tapan Ray, a retired Gujarat-cadre IAS officer is expected to hold the charge of the post till Kaul assumes charge.
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Time of India
a day ago
- Time of India
How Bond duration impacts return in a falling rate regime, Gautam Kaul explains
As interest rates begin to soften, fixed income investors are increasingly revisiting the role of bond duration in shaping portfolio returns. In an insightful conversation, Gautam Kaul, Senior Fund Manager – Fixed Income at Bandhan AMC , breaks down how duration plays a critical role in enhancing returns during a falling rate environment. Explore courses from Top Institutes in Please select course: Select a Course Category Degree Data Science Artificial Intelligence MBA MCA Healthcare PGDM Technology Management Data Analytics Leadership Digital Marketing Operations Management Project Management Public Policy CXO Design Thinking Cybersecurity Finance Others Data Science Product Management healthcare others Skills you'll gain: Data-Driven Decision-Making Strategic Leadership and Transformation Global Business Acumen Comprehensive Business Expertise Duration: 2 Years University of Western Australia UWA Global MBA Starts on Jun 28, 2024 Get Details From the mechanics of price sensitivity to strategy shifts for various investor profiles, Kaul offers a clear roadmap for navigating bond markets in a changing rate cycle. Edited Excerpts – Kshitij Anand: For investors, especially retail ones, could you give them a small masterclass on how rate cuts affect investor demand for different tenures of corporate bonds? I'm sure a lot of new investors—or the Gen Z ones, you could say—might not relate much to how bonds work. There's often more fear than accurate knowledge. So, if you could simplify this equation for them, that would be really great. Gautam Kaul: When you're investing in any fixed income instrument, there are two broad risks that you are exposed to—duration and rating. Rating refers to the credit risk associated with the bond. Duration refers to the weighted average maturity of all the bond's cash flows. To simplify, the sensitivity of a bond's price to interest rate movement is measured by its duration. For example, if a bond has a duration of one, then for a 1% change in yields, the price of the bond will rise or fall by 1%. Similarly, if the bond has a duration of 10, a 1% change in interest rates would cause a 10% change in the bond price—plus or minus. There's a bit of nuance to this, but that's the basic principle. Why is this important? Because when interest rates rise or fall, the mark-to-market (MTM) impact on your portfolio is governed by the bond's duration. Bond returns come from two components: the coupon (or carry) and the MTM impact. Unless you are holding a bond till maturity, your holding period return consists of the coupon you earn—typically the bulk of the return and accrued daily—and any MTM gain or loss. So, taking our earlier example: if your bond has a duration of one and interest rates drop by 1%, you will gain 1% from the MTM, in addition to your regular coupon. If you sell at that point, that MTM gain is realized. When we talk to investors about fixed income, we encourage them to look at two risks: duration risk, which drives the volatility of a bond fund, and credit risk. These are the key parameters you should evaluate before choosing which funds to invest in. SEBI has helped here through its categorization framework. For example, liquid funds cannot invest in instruments with maturities beyond 90 days; low-duration funds are capped at one year; short-term funds have defined duration bands. So, investors get a clear idea of the maximum and minimum duration risk a fund may carry. For example, short-term funds must maintain a Macaulay duration between one and three. So, in that case, for a 1% change in interest rates, your MTM impact could range from 1% to 3%. Earlier, it was relatively easy to assess the duration risk of a portfolio but much harder to assess credit risk. You had to dig into fact sheets and manually check the ratings of every holding. But a few years ago, SEBI introduced the Potential Risk Class (PRC) matrix—a simple yet powerful tool. It requires every fixed income fund to define the maximum level of duration risk and credit risk it can take. For example, if a fund declares itself as PRC "A" on credit risk, that means the fund's average portfolio rating will be at least AAA at all times. If it's PRC "B," then the average rating must be at least AA. This gives the investor a clear sense of the maximum credit and duration risks associated with the fund—two of the most critical parameters when investing in fixed income. So, if you do nothing else, just look at the PRC classification. It gives you a reliable, forward-looking measure of the fund's risk profile. Kshitij Anand: Apart from that, looking at the industry more broadly—do you see the Indian bond market emerging as a relatively safe haven amid the global debt uncertainty? Gautam Kaul: Oh yes, absolutely. In fact, I'd say India is, if not unique, certainly one of the few economies that offers both macroeconomic stability and high yields. To give some context—long-term fixed income investors are primarily trying to preserve the purchasing power of their money. That means earning returns that beat inflation, which is the holy grail. Achieving that consistently requires macro stability: low fiscal deficit, low and stable inflation, and ideally a manageable current account deficit. India ticks all those boxes. Our current account deficit is low and stable. We're less exposed to tariffs compared to economies like Southeast Asia or China, which rely heavily on manufacturing exports. Our exports are predominantly services-based, which are more insulated from global tariff issues. Inflation is also well under control—lower than the RBI's forecast and well below its upper tolerance level. The government has been fiscally responsible, reducing the fiscal deficit year after year (except during the COVID period, where even then, spending was targeted and controlled). They've also committed to bringing down the debt-to-GDP ratio over time. These are exactly the metrics that any global fixed income allocator looks at. As a result, global investors have already started viewing India as a fixed income haven, even before our inclusion in the JP Morgan bond index. Just consider this example: If you compare two countries—one where the fiscal deficit is rising from 5.5% to 6.5-7%, and another where it's falling from 5.5% to 4.5%—you'd assume the latter is a developed market and the former an emerging one. But in India's case, it's the opposite. That speaks volumes about our policy strength. And all of this hasn't happened by accident—it's the result of deliberate, disciplined policy decisions. For a global fixed income allocator, this signals a stable environment with attractive returns. Another key point: foreign ownership of Indian government bonds is still quite low—even post JP Morgan inclusion, it's under 3%. For comparison, many other emerging markets have foreign ownership ranging between 5-15%. So yes, India offers an attractive macro landscape, a deep and growing market, and plenty of headroom for increased foreign participation. I believe we're well-positioned to become a preferred destination for global fixed income allocations. Kshitij Anand: Also, let me get your perspective on ESG — one of the key themes that has emerged in both equity and bond markets. Are investors assigning a valuation premium to companies issuing ESG-compliant bonds, and what is driving the growing popularity of these instruments? Gautam Kaul: ESG as a movement — and the market attached to it — has gained significant traction and momentum in the West. In India, we are still at a very early stage of the entire ESG investing platform. Even within our landscape, equity is where we are seeing more traction compared to fixed income. That said, we have seen some private corporates issuing ESG bonds. In fact, the Government of India also issues green bonds. So, there is a concerted effort, and of course, some demand for these instruments from specific segments. From a fixed income perspective, the market is still nascent and developing. Most of the demand for ESG bonds currently comes from foreign investors rather than domestic ones. I believe that as awareness grows, we could see ESG-dedicated funds in India as well — either from Indian or foreign investors — which could further drive investment in ESG bonds. There is great potential here, but we're still in the early days. Is the market paying a significant premium for ESG bonds? Selectively, yes. But it still needs to evolve into a more widespread and common practice. For instance, the government's borrowing cost for green bonds versus regular bonds isn't very different — perhaps just a 5-basis point premium. When green bonds were first introduced, our sense was that this premium — or "greenium," as it's called — could be much higher. That might still be the case in the future, given the early stage of the INR bond market.
Time of India
a day ago
- Time of India
Corporate bonds meet arbitrage: a smarter, tax-efficient play for fixed income investors
In a rapidly evolving fixed income landscape, investors are increasingly seeking strategies that deliver not just stability but also tax efficiency. One such approach gaining attention is the blend of corporate bond exposure with arbitrage opportunities — a smart way to generate steady returns while optimizing post-tax outcomes. Gautam Kaul, Senior Fund Manager – Fixed Income at Bandhan AMC, believes this hybrid strategy can offer the best of both worlds: predictable income from high-quality corporate debt and low-volatility gains from arbitrage. Explore courses from Top Institutes in Please select course: Select a Course Category CXO Data Analytics MCA others Project Management Finance Degree Operations Management Healthcare Management Data Science Technology PGDM healthcare Public Policy Others Digital Marketing MBA Leadership Design Thinking Data Science Product Management Cybersecurity Artificial Intelligence Skills you'll gain: Technology Strategy & Innovation Emerging Technologies & Digital Transformation Leadership in Technology Management Cybersecurity & Risk Management Duration: 24 Weeks Indian School of Business ISB Chief Technology Officer Starts on Jun 28, 2024 Get Details Skills you'll gain: Operations Strategy for Business Excellence Organizational Transformation Corporate Communication & Crisis Management Capstone Project Presentation Duration: 11 Months IIM Lucknow Chief Operations Officer Programme Starts on Jun 30, 2024 Get Details Skills you'll gain: Customer-Centricity & Brand Strategy Product Marketing, Distribution, & Analytics Digital Strategies & Innovation Skills Leadership Insights & AI Integration Expertise Duration: 10 Months IIM Kozhikode IIMK Chief Marketing and Growth Officer Starts on Apr 7, 2024 Get Details Skills you'll gain: Digital Strategy Development Expertise Emerging Technologies & Digital Trends Data-driven Decision Making Leadership in the Digital Age Duration: 40 Weeks Indian School of Business ISB Chief Digital Officer Starts on Jun 30, 2024 Get Details by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo In this exclusive conversation with ETMarkets, Kaul shares why this product mix is particularly suited for today's macro environment, how retail participation is evolving, and what investors should watch as India enters a new rate cycle. Edited Excerpts – Kshitij Anand: Let me ask you, how does combining corporate bonds and arbitrage strategies help in creating a stable return profile for investors? Gautam Kaul: I believe you're referring to the new category where there is a fund of funds that feeds into arbitrage or non-directional equity, as well as fixed income. The idea is to provide a stable return profile. For example, in our case, the Bandhan Income Arbitrage Plus feeds into the Bandhan Corporate Bond Fund (approximately 60%) and the arbitrage fund (around 40%). Live Events What investors get is non-directional equity exposure and corporate bond exposure. In our case, the strategy is to manage the bond maturity between one to four years. The cherry on top, of course, is the tax advantage—after two years, it qualifies for long-term capital gains (LTCG). So, it's a much more efficient way of allocating to fixed income. One challenge we found many investors were facing was that, while they wanted to allocate to fixed income, the tax change introduced in March 2023 made them hesitant due to the imposition of short-term capital gains even on long-term investments. This fund not only provides a stable return profile but also offers a much better post-tax experience for investors. Kshitij Anand: In fact, can you also explain what the Bandhan Income Plus Arbitrage Fund of Funds is, and how it differs from traditional debt or arbitrage funds? Gautam Kaul: The Bandhan Income Plus is a fund of funds. For those unfamiliar with the concept, a fund of funds is a fund that, in turn, invests in other funds. So, you get a combination of different funds in a single package. In our case, the strategy is to allocate 35–40% of the inflows to the arbitrage fund, and the rest to the Bandhan Corporate Bond Fund. As mentioned earlier, the objective is to create a stable return profile through non-directional equity exposure. We believe that, for most debt investors, the majority of their investments should ideally be in the one- to five-year maturity bucket, forming the core of their long-term asset allocation. This fund of funds, combining arbitrage and corporate bond strategies, provides that exposure in a more tax-efficient manner. Our Corporate Bond Fund is PRC(A) rated, meaning the average rating of the portfolio must be maintained at AAA at all times. The goal of the corporate bond fund itself is to maintain a very high-quality, liquid portfolio that offers a stable investment experience. And because it's a corporate bond fund, the idea is that most of the time, investors will earn a spread over the sovereign yield curve. Kshitij Anand: Let me also get your perspective on interest rate movements. We have already seen a 50 basis point cut by the RBI, and the central bank is expected to possibly cut further over the next 12 months. How are funds like yours positioned to benefit from or be impacted by a falling interest rate environment? Gautam Kaul: What I find is that long-duration fixed income often tends to be a tactical play for investors. With equity, you can invest for the long term, but bond investments tend to be more tactical — if the RBI is cutting rates, investors get in, and then exit once the benefit is realized. However, one must look beyond just the rate cuts. While rate cuts are obviously important and a major contributor to mark-to-market gains for investors, there is more to the story. Right now, the market seems fairly divided — will the RBI need to cut further, and if so, when? That's one part of the narrative. The other part is about looking at relative valuations and identifying segments of the yield curve that offer value, even in the absence of a rate cut. So, when you think of fixed income, consider it as a part of long-term asset allocation. Within that framework, portfolio managers like us try to exploit whatever value exists at various points on the curve. As things stand today, given that both growth and inflation are somewhat undershooting expectations, there's probably a case for rate cuts. More importantly, the Reserve Bank is already providing liquidity — first through OMOs and then via the CRR cut, which takes effect from September. This should lead to reasonable demand for both high-quality corporate bonds and government securities. From a portfolio construction perspective, depending on your appetite for duration, you could consider five- to seven-year G-Secs or corporate bonds. For those with a longer investment horizon and greater appetite for volatility, we believe long-term government securities offer significant value. A 30-year G-Sec, for instance, offers immense potential — not just as a tactical mark-to-market play, but as a long-term investment where you can lock in an attractive annualised return over three decades from a Government of India credit. Kshitij Anand: Let me also get your perspective on the retail investor side. Retail investors seem very bullish on equities, with SIP flows exceeding ₹27,000 crore. But are they also showing interest in short-term corporate bonds, or is demand largely institutional? Gautam Kaul: I think the industry has done a great job not only in promoting mutual funds but also in reinforcing the concept of asset allocation. Many concepts in finance that may seem boring — like asset allocation — are actually what work best over the long term. Retail investors are beginning to appreciate that a long-term equity journey and the compounding it enables are more important than trying to make large, one-off allocations. Proper asset allocation ensures your compounding journey doesn't get disrupted at the wrong time. Also, fixed income acts as a stabiliser in portfolios, and that need is being increasingly recognised. There was some hesitation earlier, particularly due to the post-tax experience not being favourable. But with the introduction of new products, we're seeing traction from both retail and institutional investors. In absolute numbers, institutional investors stand out due to the large ticket sizes they bring. But in terms of the number of investors, we're seeing strong interest across categories — from short-term corporate bond funds to gilt, dynamic, and long-duration fund categories. Both retail and HNI investors have been coming in larger numbers over the past six to twelve months.
Time of India
2 days ago
- Time of India
‘Darekar panel diluting benefits offered by '19 GR on self-redevpt'
Mumbai: The recommendations of the Pravin Darekar committee on self-redevelopment will negate the benefits offered by the state govt through its 2019 Govt Resolution (GR) said housing activist Chandrashekar Prabhu. The committee submitted its report to the govt last week in the Vidhan Bhavan. CM Devendra Fadnavis, while accepting the report, said the recommendations would be forwarded to various depts to be studied and based on the recommendations of the various depts, the govt would come out with a new policy for self-redevelopment. Comparing the benefits offered in the 2019 GR on self-redevelopment and the recommendations of the Darekar committee, Prabhu said the GR offered 10% more floor space index (FSI) while the committee has recommended an additional 10% increase in carpet area. "Residents of a building that has opted for self-redevelopment get anywhere from 50% to 400% additional area. The 10% increase in carpet area means you get no extra area at all," he said. You Can Also Check: Mumbai AQI | Weather in Mumbai | Bank Holidays in Mumbai | Public Holidays in Mumbai He further pointed out that the committee has recommended self-redevelopment for buildings based on road width. "Buildings that abut roads that are nine metres or more in width can opt for self-redevelopment. What about authorised buildings on roads with less than 9-metre width? There should be no discrimination based on road width," he said. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like How Much Does It Cost to Rent a Private Jet - The Prices May Surprise You! Private Jet I Search Ads Learn More Undo The development of software and use of blockchain technology recommended by the committee to approve self-redevelopment projects would be self-defeating, warned Prabhu. "He said those opting for self-redevelopment are middle-class residents and govt must give the option of online or physical submission of proposals." he said, adding if the one-window system for clearance of proposals within three months is to be a reality then an IAS officer must be appointed to look into each case and smoothen out hurdles. Citing the quality of Cidco buildings, Prabhu said many buildings have become old and dilapidated with 10-15 years and are in urgent need of redevelopment. "The committee has recommended 30 years as the eligibility criteria for self-redevelopment. This should be done away with," he said. The committee's recommendation takes away the benefit of procuring TDR at 50% of the Ready Reckoner Rate as mentioned in the 2019 GR, instead it has proposed a 10% discount on premiums, said Prabhu.
