Curated investment management platform Kotak Cherry, which was recently launched, is offering interest rates of up to 10% on two corporate bonds.
According to the investment platform, it is offering secured non-convertible debentures of Kogta Financial India Limited at a discount of 10% internal rate of return (IRR) between July 1 and 7. After the offer period, rates will be reduced to 9.5%.
According to Kotak Cherry, Kogta is an exclusive and curated bond, which is not available on any other platform. The bond offers double digits for a tenure of 2.5 years and 10% of the principal is also returned every quarter.
The bond has been rated ‘A’ by rating agency Icra Limited. According to experts, this rating means that the issue has low credit risk but is not as secure as AAA-rated instruments.
Kotak Cherry currently offers only two bonds – Kogta and IIFL Finance Limited (currently not offering any discount and offered at 8% yield) on its platform.
Srikanth Subramaniam, Designated Chief Executive Officer, Kotak Cherry said, “The volatile market has created uncertainty among investors and they are looking at bonds for safety. We feel this is an opportune time to reward retail investors and steer them to the bond and bond market. Bonds come with a reliable amount of certainty and offer higher returns than fixed deposits as well as lower risk than equities, however, choosing the right bond is still important.”
Kotak Investment Advisors, a subsidiary of Kotak Mahindra Bank, had launched Kotak Cherry early last month.
The platform provides investment solutions to users through a digital app backed by investment managers. It offers investment solutions ranging from stocks, bonds, mutual funds, fixed deposits and other investment opportunities like National Pension Scheme (NPS) to Exchange Traded Funds (ETFs).
According to the company, Kotak Cherry is enabled as a Do It Yourself (DIY) execution platform. Going forward, it is also expected to offer financial life-class solutions such as stock basket, robo advisory, life-, medical-, general-insurance, and enabling international investments.