"A minor discount on the buying price makes a significant difference in yield. A ₹1,000 bond at 9% interest bought at ₹994 would have an effective interest rate of 9.05%." - 5 bps in govt bond may be significant but not in private corporate bonds in India. Regular bond investors who shop in the secondary market seek far higher yields.
"A minor discount on the buying price makes a significant difference in yield. A ₹1,000 bond at 9% interest bought at ₹994 would have an effective interest rate of 9.05%." - 5 bps in govt bond may be significant but not in private corporate bonds in India. Regular bond investors who shop in the secondary market seek far higher yields.
Btw, is it actually worth it for SEBI to ask a firm to stop issuing bonds based on this? Won't SAT allow this if in reality there's no loss ?
Also, what should be the "fraud appetite" ? I mean certainly some frauds can be ignored, say someone did all this and were only able to make 10 Rs, do we want to go after them ? I say we can create memes and publically shame them, not for fraud, but for incompetent fraud.
"A minor discount on the buying price makes a significant difference in yield. A ₹1,000 bond at 9% interest bought at ₹994 would have an effective interest rate of 9.05%." - 5 bps in govt bond may be significant but not in private corporate bonds in India. Regular bond investors who shop in the secondary market seek far higher yields.
"A minor discount on the buying price makes a significant difference in yield. A ₹1,000 bond at 9% interest bought at ₹994 would have an effective interest rate of 9.05%." - 5 bps in govt bond may be significant but not in private corporate bonds in India. Regular bond investors who shop in the secondary market seek far higher yields.
Most insightful !! Thanks, please keep writing :)
Don't quote the guy who said not to quote him.
:p
Btw, is it actually worth it for SEBI to ask a firm to stop issuing bonds based on this? Won't SAT allow this if in reality there's no loss ?
Also, what should be the "fraud appetite" ? I mean certainly some frauds can be ignored, say someone did all this and were only able to make 10 Rs, do we want to go after them ? I say we can create memes and publically shame them, not for fraud, but for incompetent fraud.
Some of these facts seem incorrect. What I understand is that bankers collectively decide the price and any one bank alone cannot decide.
"These bonds needed at least ₹10 lakh per investor." is incorrect.