Latest news with #GripInvest
Time of India
7 days ago
- Automotive
- Time of India
Gensol defaults on BluSmart-linked bond repayment for May
Gensol Engineering , promoted by the founders of electric mobility firm BluSmart , has defaulted on payment of around ₹4 crore to its pass-through certificates ( PTCs ) holders this month. The last repayment that was processed successfully was in April, people aware of the matter said. The troubled solar engineering, procurement and construction company had raised these funds by issuing PTCs, which were distributed to retail investors via online platform Grip Invest. PTCs are usually loans that are raised in lieu of any underlying asset. In this case, the company had offered vehicles plied on the BluSmart platform as collateral for these loans. As the vehicles plied and generated revenue, repayments were processed out of that cash flow. Now, as the BluSmart cab service stopped and deal talks with ride hailing platform Uber and fleet operators are yet to come to fruition, the loan repayment has become uncertain. Confirming the development, Grip Invest founder Nikhil Agarwal said that while the total issue size was ₹5.6 crore, 56per cent of the principal amount has been repaid by Gensol and currently the outstanding is ₹4.04 crore. These loans were secured against 76 vehicles that were previously run on the BluSmart platform. On May 29, the Delhi High Court passed a final order and gave Vriksh Advisors, the lessor, the right to operate, sell or lease the assets. 'All vehicles are now in the possession of the lessor. The same have been inspected and found to be in good working order,' Aggarwal told ET. Vriksh Advisors is a subsidiary of Grip Invest. Aggarwal said the company has taken possession of the vehicles, inspected them, created charging facilities and is now in talks with fleet operators looking to deploy these vehicles on ride sharing platforms. A senior industry insider, however, said the repayment structure for PTCs might change even if the vehicles start running. 'Commissions, revenues, pricing and all the other factors would not remain the same across all platforms, so those things will need to be considered before starting the repayment schedule,' he pointed out. Vriksh Advisors is in the process of finding the best suitable buyer of the assets, so they can be used to repay the loans taken against them, people cited above said. 'People invested in BluSmart bonds and PTCs thinking of the cab services, which had a big brand value, and they were also attracted to the high returns offered by these instruments,' said an investor who has exposure to BluSmart bonds. According to a credit rating document issued by Care Edge Ratings on Tuesday, these bonds issued in 2023 were due to mature in 2027 and offered a coupon rate of 13.6per cent . ET had reported on April 21 that BluSmart investors were expecting major defaults on bonds they had purchased via platforms like Yubi, Centricity and others. The ride-hailing company had issued more than ₹100 crore worth of bonds over the last one year. The investor quoted above said that more than ₹80 crore of NCDs are due for repayments from BluSmart. This comes at a time when the Gensol promoters Anmol Singh Jaggi and his brother Puneet Singh Jaggi are under investigation for siphoning off funds from the company for personal consumption. While BluSmart has halted its operations, Gensol's bank accounts have been frozen under directives from the National Company Law Tribunal, Ahmedabad. State-run Indian Renewable Energy Development Agency (Ireda) last week said it has moved the Debts Recovery Tribunal, Delhi, against Gensol Engineering and its arm Gensol EV Lease, claiming a default of about ₹729 crore. Ireda had earlier filed an insolvency petition against Gensol. The entire saga started after market regulator Sebi kicked off an investigation into Gensol Engineering following a stock manipulation complaint it received in June 2024. Its findings showed that the Jaggi brothers diverted loans Gensol took to procure electric vehicles for personal use.
Time of India
13-05-2025
- Business
- Time of India
No new tax-free bonds issued since 2016. Here's how to tap existing ones for tax-free income
Tax-free bonds, a unique fixed income instrument, offer investors the advantage of earning interest income without the burden of taxation. Nikhil Aggarwal , Founder & Group CEO of Grip Invest, in an interaction with ETMarkets, emphasized that tax-free bonds became popular as they allow individuals, particularly those in higher tax brackets, to generate better post-tax returns . Tax-free bonds, which were initially issued by public sector undertakings ( PSUs ) under government directives, gained traction as they provided investors with secure, government-backed returns without any tax liability. Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Learn How Smart Traders Use Data to Navigate Volatile Markets Trader Headline Learn More Undo "These came to be known as or are known as tax-free bonds because the interest is tax-free in the hands of the investor," he said, underscoring the appeal of these bonds for those seeking tax-efficient investments. Bonds Corner Powered By No new tax-free bonds issued since 2016. Here's how to tap existing ones for tax-free income Tax-free bonds, last issued in 2016 by PSUs, remain attractive due to their post-tax returns exceeding those of fixed deposits. Investors can access these AAA-rated bonds through wealth managers, stock market platforms, or online bond platforms. With interest rates ranging from 5.5% to 6% tax-free, these bonds offer liquidity and potential capital gains in a declining interest rate environment. Foreign banks dump $3 billion worth g-secs amid India-Pak tensions Is a US recession imminent and what would be the impact on India? How should we manage a robust portfolio in this scenario? Will NaBFID successfully navigate offshore bond market? Indian bond yields snap 7-week falling streak due to border conflict Browse all Bonds News with The last issuance was in 2016, and since then, no new tax-free bonds have been issued. However, Aggarwal pointed out that the existing supply remains robust, allowing investors to still participate in these instruments. "When they were done last in 2016, they were issued in large volumes and hence, there is sufficient supply in the market," he stated. Live Events Why tax-free bonds? One of the key advantages of tax-free bonds, as Aggarwal highlighted, is the favorable post-tax returns. While the interest rates on these bonds range from 5.5% to 6% tax-free, they are comparatively more attractive than fixed deposits (FDs) on a post-tax basis. For instance, a 6% FD return is taxable, reducing the effective yield to around 4.2% to 4.5% for those in the 30% tax bracket. "Tax-free bond today is actually a far better investment option than an FD from a pure returns perspective," Aggarwal emphasized, noting the significant post-tax advantage. In terms of liquidity, tax-free bonds also stand out as they can be easily traded in the secondary market without penalties. "In the case of a tax-free bond, they are actually super liquid," Aggarwal said, adding that investors can exit these bonds before maturity without facing a penalty, unlike FDs, which often impose a premature withdrawal charge. Also read: Is a US recession imminent and what would be the impact on India? How should we manage a robust portfolio in this scenario? Aggarwal also noted that in the current interest rate environment, where the Reserve Bank of India (RBI) has already implemented two rate cuts and is expected to lower rates further, tax-free bonds present an additional advantage of potential capital gains. "Investors purchasing tax-free bonds today will not only see interest but could see some capital appreciation as yields compress," he said. While new issuances of tax-free bonds have been halted, the possibility of reintroducing them remains uncertain. Aggarwal indicated that from the government's perspective, issuing tax-free bonds involves a trade-off as it leads to a loss in tax revenue. However, he suggested that the government could consider offering new tax-free bonds even at a lower interest rate, given their continued attractiveness as a risk-free investment option. Who issues tax-free bonds? Tax-free bonds, typically issued by government-backed entities such as NHAI, Rural Electrification Corporation, and others, carry AAA ratings, making them a low-risk investment option. "They do not typically see defaults. These are bodies like NHAI, Rural Electrification Corporation of India, and the likes. So, they are AAA rated, very secure instruments," said Aggarwal, drawing attention to their stability and security. How to invest in tax-free bonds? Despite no new issuances, retail investors can still access tax-free bonds through three primary routes. First, they can reach out to their wealth managers or bank relationship managers, who may have access to these bonds. Second, they can directly purchase these bonds through stock market platforms like Groww, Zerodha, or other brokerage apps. "You can actually try to buy these bonds directly in the stock market. Just open your Groww, Zerodha, whatever app you use and actually put in a request," said Aggarwal. The third option is through Online Bond Platforms (OBPP), where such bonds are periodically offered based on investor demand. For retirees and those seeking passive income, tax-free bonds can be particularly appealing due to their relatively higher coupon rates. Aggarwal explained, "The coupon on these bonds is in the range of 8% to 9%, making the interest payout quite healthy and interesting for someone looking for passive income." He provided a practical illustration: a Rs 10 lakh investment in a tax-free bond with a 9% coupon rate would yield approximately Rs 8,000 per month as interest income. Also read: Will NaBFID successfully navigate offshore bond market? For retail investors looking to enter the tax-free bond market, Aggarwal recommended exploring existing bonds from entities like NHAI and REC, readily available on brokerage platforms. With a minimum investment size of Rs 1,000, these bonds are accessible to a broad range of investors, offering a compelling combination of tax-free income, security, and liquidity. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
