A Thorough Overview of Indian Debt-Based Alternative Investment Opportunities

A Thorough Overview of Indian Debt-Based Alternative Investment Opportunities

On this blog, till now we have written on many individual investment products, and some platforms and will also keep on writing in the future. But as we are growing and writing more, we feel readers are getting confused with the variety of investment products/options available to them. So in this article, we will summarize all available ALT investment options in the debt category.

By the way, we have a Whatsapp community 📲, If you are not part of the community, you are missing out on good discussions, networking opportunities and access to exclusive vetted deals. Feel free to join it by clicking here.

So let's dive right into each of these options to discover the investment products available in each and the platforms where you can invest in them. Note: This will be a long read!

Debt-Based Alternative Investments

This is the biggest segment of alternative investments as around 75% of all ALTs are debt-based. Various investment products are going around in this segment primarily:

  1. Listed & Unlisted Debt

  2. Securitized Debt Instruments

  3. Market Linked Debentures

  4. Interim Financing Bonds (Super Senior Secured Bonds)

  5. Invoice Discounting

  6. Digital Solar/Solar Financing

  7. P2P Lending

  8. Revenue/Royalty Financing

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Note, that some of the above products can also be present under Equity or SPV/LLP structure, it depends on how the platforms have structured it.
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Disclaimer: Some of the links below in the tables will have referral links, this doesn't harm you in any way and supports the blog with some basic referral fees.

Listed & Unlisted Debt

Debt is probably the simplest out there to understand from all other alternative products. It is simply the money the issuer has come to raise from the public. The issuer can choose whether to pay a coupon on this debt and is expected to return the principal invested at maturity.

Platforms

One thing to note is the below table contains Online Bond Platforms, You can buy listed corporate debt from any bond broker registered with an exchange, one such list is available here. Also to note, SEBI released an OBPP framework in Nov 2022 under which any platform selling listed bond have to be registered with an exchange. You can check the regulations here.

PlatformMin. InvestmentAvg. Returns (IRR)Listed/Unlisted
altGraaf₹1,00,0009% - 18%Unlisted
Grip Invest₹10,0008% - 14%Listed (OBPP)
IndiaBonds₹10,0008% - 14%Listed (OBPP)
Wint Wealth₹1,0009% - 11%Listed (OBPP)
BondsIndia₹10,0008% - 12%Listed (OBPP)
GoldenPi₹10,0008% - 12%Listed (OBPP)
BondsKart₹10,0008% - 12%Listed (OBPP)
The Fixed Income₹10,0008% - 11%Listed (OBPP)
Altifi₹1,0008% - 11%Listed (OBPP)

Securitized Debt Instruments (SDI)

If I am not wrong, SDIs as a product were first launched in India by Grip Invest and were listed on NSE on 7th October 2022. SDIs can take multiple forms, however in simple terms, it is a pool of loans, leases or bonds packaged all together, rated by an Indian rating agency and then listed on the exchange. SDIs are SEBI-regulated products.

Platforms

PlatformProductsMin. InvestmentAvg. Net Returns (IRR)
Grip InvestLoanX, BondX, LeaseX, InvoiceX₹50,000 - ₹10,00,00011% - 19%

Market Linked Debentures (MLDs)

MLDs are a sweet spot between equity and debt securities, giving you exposure to both worlds. MLDs are always linked to an underlying asset, generally to the Nifty 50 Index. My colleague Om Shukla has covered MLDs in detail in the below blog.

Platforms

Multiple platforms offer you to explore available MLDs and some of the listed OBPP platforms allow you to trade them. We have not included the average return column as that's highly dependent on what is the structure of the MLD.

PlatformMin. Investment
Incred Money₹1,00,000
IndiaBonds₹10,000
BondsIndia₹10,000
BondsKart₹10,000
The Fixed Income₹10,000
Altifi₹10,000

Interim Financing Bonds

Interim Finance Bonds are Super Senior Secured Bonds that are generally issued by bankrupt companies to try and save their business under the IBC laws. Om Shukla has written a detailed article on these instruments as well.

Platforms

We believe there is only one platform solely focused on the interim financing space. But if there are any more that you know of, please let us know. These bonds might be available on traditional listed/unlisted platforms as well. But to these, they are high-risk instruments so exercise caution.

PlatformMin. InvestmentAvg. Net Returns (IRR)
LegalPay₹1,00,00018% - 24%

Invoice Discounting (ID)

Invoice Discounting is one of my favorite products and we share a lot of exclusive deals on this in our Whatsapp Community as well. Invoice Discounting is basically providing a short-term loan (30-90 days) to the company based on its receivables. We have written extensively on this topic, you can check the below blog post.

Platforms

There are multiple platforms for Invoice Discounting and most of these platforms have grown exponentially, I have listed them below in order of my preference and the trust I have in these platforms.

PlatformMin. InvestmentAvg. Net Returns
altGraaf₹95,00011% - 13%
BetterInvest₹50,00016% - 18%
Tap Invest₹50,00012% - 14%
TradeCred₹3,00,00012% - 14%
KredX₹3,00,00010% - 13%
Tyke Invest₹10,00012% - 15%
LendPartnerz₹1,00,00012% - 14%
Grip Invest (via InvoiceX)₹1,00,00010% - 13%

Digital Solar/Solar Financing

Solar Financing is generally in the form of a Power Purchase Agreement (PPA) where you would buy a fractional portion of the solar plant and any returns generated via that plant in the form of electricity are paid back to the investors over the life of solar plant which is generally 15 years. We have covered this topic again in a very detailed blog below, do give it a read.

Platforms

There are only a handful of platforms working in this space. I have added one more column duration to mention the tenure of the deals generally showing up on these platforms.

PlatformMin. InvestmentAvg. Net Return (IRR)Deal Duration
Sundaygrids₹8,50010.5% - 12.5%15 years with a break clause
Pyse₹10,0009% - 12%6 months - 12 months
SustVest₹15,00010% - 12%6 months - 3 years

P2P Lending

Probably one of the most famous alternative investment options among Indians. P2P Lending has been present informally for decades, but RBI formalized this area with the launch of NBFC - P2P license in 2018. We have covered this in detail in the below blog.

Platforms

There are many platforms in this space, The RBI list has not been updated for the last 2 years so we might list some closed ones or miss some existing ones, Please feel free to point out in comments or message us if this is the case.

PlatformsMin. InvestmentAvg. Net Return (IRR)
LendenClub₹10,00010% - 12%
Capitall Club₹5,00014% - 16%
LendBox₹10,00010% - 12%
Faircent₹10,00010% - 12%
LiquiLoans₹10,000Upto 10.5%
12% Club (BharatPe)₹10,00010% - 12%
Cred Mint₹10,000Upto 9%
Fi jump₹10,000Upto 10%
MobiKwik Xtra₹1,00010% - 12%
IndiaP2P₹10,00014% - 16%
Grip Invest (via LoanX)₹1,00,00010% - 13%

Revenue/Royalty Financing

Revenue/Royalty Financing means the company you invest in gives a certain % of its monthly revenue as a return to the investor. This return % can be different for each deal and usually, the company you have invested in has the option to buy back the royalty agreement after 12 months. We don't see these types of deals very often in the alternative community but they do come up from time to time, however, we have never seen a perpetuity royalty deal (like you see on Shark Tank)

You can read our in-depth article on Tyke Royalty deals at below link.

Platforms

PlatformMin. InvestmentAvg. Net Returns
Tyke Invest₹10,00012% - 25%
KlubWorks₹2,50,00020% - 27%

Bottom Line

Hope you found the above tables useful, we will soon be writing detailed pieces on the debt-based products we haven't covered and also start doing deep dives into individual companies. I would recommend you to join our newsletter for the blog and also the Whatsapp community to stay updated.
Finally, here is the below consolidated table which can be shared with anyone in your circle!

PlatformDebt ProductsMin. InvestmentAvg. Returns (IRR)
altGraafInvoice Discounting, Unlisted Debt₹95,0009% - 18%
Grip InvestListed Debt, Securitized Debt Instruments, P2P Lending, Invoice Discounting₹10,0008% - 14%
IndiaBondsListed Debt, Market Linked Debentures₹10,0008% - 14%
Wint WealthListed Debt, Market Linked Debentures₹1,0009% - 11%
BondsIndiaListed Debt, Market Linked Debentures₹10,0008% - 12%
GoldenPiListed Debt, Market Linked Debentures₹10,0008% - 12%
BondsKartListed Debt, Market Linked Debentures₹10,0008% - 12%
The Fixed IncomeListed Debt, Market Linked Debentures₹10,0008% - 11%
AltifiListed Debt, Market Linked Debentures₹1,0008% - 11%
Incred MoneyMarket Linked Debentures₹1,00,000Deal Dependent
LegalPayInterim Finance Bonds₹1,00,00018% - 24%
BetterInvestInvoice Discounting₹50,00016% - 18%
Tap InvestInvoice Discounting, Non-Convertible Debentures, Asset Leasing₹50,00012% - 14%
TradeCredInvoice Discounting₹3,00,00012% - 14%
KredXInvoice Discounting₹3,00,00010% - 13%
Tyke InvestInvoice Discounting, Royalty Financing₹10,00012% - 15%
LendPartnerzInvoice Discounting₹1,00,00012% - 14%
SundaygridsDigital Solar₹8,50010.5% - 12.5%
PyseSolar Assets Financing₹10,0009% - 12%
SustVestSolar Assets Financing₹15,00010% - 12%
LendenClubP2P Lending₹10,00010% - 12%
Capitall ClubSME P2P Lending₹5,00014% - 16%
LendBoxP2P Lending₹10,00010% - 12%
FaircentP2P Lending₹10,00010% - 12%
LiquiLoansP2P Lending₹10,000Upto 10.5%
12% Club (BharatPe)P2P Lending₹10,00010% - 12%
Cred MintP2P Lending₹10,000Upto 9%
Fi jumpP2P Lending₹10,000Upto 10%
MobiKwik XtraP2P Lending₹1,00010% - 12%
IndiaP2PP2P Lending₹10,00014% - 16%
KlubWorksRevenue Based Financing₹2,50,00020% - 27%

Hope you enjoyed reading the article, if you think there is something factually incorrect, please comment below the article to let us know.


Please note that this is an opinion blog and not official research advice. I am not a registered RIA in India. This blog aims to promote informed decision-making and does not discourage you from investing in any deals.

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