MLDS
NRI capital gains tax: When can you use the basic exemption limit to lower your income tax bill?
For non-resident Indians, leveraging the basic exemption limit can help mitigate normal slab rate taxes on capital gains. However, it's important to note that this exemption does not apply to capital gains taxed at special rates, such as short-term capital gains derived from listed bonds. This stipulation is clearly defined in the Income Tax law, and tax treaties may additionally offer advantages depending on the NRI's country of residence.
Gold MLDs provide cushion against gold price fall, but they aren't always safe
Gold market-linked debentures promise participation in gold’s uptick while providing a safety net on the downside, by offering a blend of debt-like safety and gold-like growth potential. However, they do not offer dividends or interest, so it would be wise for investors to look under the hood before taking this route.
Debt market to deepen as overseas participation rises after rating upgrade: Vijay Kuppaa
India's sovereign rating upgrade is poised to boost foreign investor confidence in its debt market, potentially leading to global debt index inclusion and attracting long-term institutional investors. Increased overseas participation in government securities and high-grade corporate bonds is expected to improve liquidity and deepen the market. This creates an opportune phase for domestic investors to lock in attractive rates.
Unlisted bonds likely to retain appeal despite tax changes
India's unlisted bonds market has grown over the last five years, with issuances reaching ₹1.04 lakh crore between January and July 24, 2024, compared with ₹1.87 lakh crore for the entire year 2023, ₹1 lakh crore in 2022, and ₹64,000 crore in 2021, according to Prime Database.
InCred Money's hybrid offering can give small investors upto 14.05%
Out of every ₹100 invested, ₹80 will be invested in the bonds of the issuer (in this case InCred Financial). This will protect the capital. The rest of the ₹20 will be invested in Nifty call options - an equity derivative that bets on Nifty rising in value.
Companies raising funds through high-yield issues post tax changes
Companies in India are turning to high-yield bonds and other alternative sources of finance after the removal of taxation benefits on market-linked debentures and debt mutual funds. The move has triggered a demand for private credit funds, alternative investment funds (AIFs), family offices, and high-net-worth individuals (HNIs). Private firms with ratings between BBB and A+ have seen limited appetite among qualified institutional buyers, and that has prompted them to seek funding elsewhere.
HNIs eye private credit for better returns
Market-linked debentures (MLDs) that were earlier taxed at 10% after a holding period of more than a year are now taxed at marginal tax rates. Even investments in debt mutual funds are now taxed at marginal tax rates without any indexation benefits, irrespective of the duration of the investments.
Lower-rated NBFCs to face higher fund costs
Although the outstanding market for MLDs is relatively small, certain NBFC issuers with 'AA' and lower ratings have frequently issued these bonds over the last few years. As of January 2023, the outstanding market for MLDs is ₹75,000 crore, with around 45% listed and the remaining 55% unlisted, according to data collated by NBFC industry body FIDC.
Market-linked debentures (MLDs): 5 things you should know
The tenure for MLDs typically ranges from 12 to 60 months.
Market-linked debentures (MLDs) to lose preferential taxation
MLD is a type of debt instrument where the return is not fixed and is based on the performance of an underlying index or security. This underlying security could be the bellwether index like Nifty50 or even government bond yields.
HNI investors: How the Budget impacts India’s richie rich
One should expect heightened activity in the coming weeks to get the benefit of the lower tax rate on long term capital gains till March 2023. It is interesting to note that the definition of MLDs covers a wider set of securities where the returns are based on other underlying instruments or index.
Debenture returns to be treated as short-term gains
“Income from the redemption of MLDs will be deemed to be short-term gains irrespective of the holding period and will be taxed at the highest rate which can be 30% for resident individuals and 40% for foreign companies,” said Rajesh Gandhi, partner at Deloitte India. Gandhi said this step will remove a key advantage and significantly increase the tax burden.
Will Budget 2023 boost capital markets? Here’s what to expect
With increased interest from HNIs & ultra HNIs in alternate assets, particularly in SEBI-approved alternative investment funds (AIFs), we may see tax clarity coming in for the CAT III AIFs, which will be a welcome move from the industry as well as from the investors’ viewpoint.
Indel Money raises Rs 50 crore via market-linked debentures
The market placement expertise of Yubi also helped us develop a broad investor base for the MLDs. For investors, our MLDs offer a short tenure investment option with principal protection and assured return/pay-off despite market volatility. Our gold-backed MLDs aptly address the illiquidity concerns over investments. The MLDs will help us further diversify fund-raising avenues. The launch of MLDs is a part of our mission to expand our presence across India and further build our operational efficiency.
Shriram City to raise up to Rs 300 cr by issuing bonds
A part of Shriram Group, Shriram City provides specialised services in retail and Micro Small and Medium Enterprise (MSME) lending.
Anand Rathi a good play on growth in mutual fund space
Based on the annualised earnings in the five months to August 2021, the issue commands a price-earnings (P/E) multiple of 18.7. According to Bloomberg, its listed peer in the wealth management business, IIFL Wealth Management trades at FY22 forward P/E of 25.9.
Investors take a fancy to market-linked debentures returns
"Wealthy investors are now looking short term as the interest rate cycle will likely turn after 12-18 months," said Ajay Manglunia, head of debt capital market at JM Financial. “MLDs are gaining popularity in this environment as the absolute returns would be rewarding after factoring in the long-term capital gain tax."
Amfi appointed agency to carry out valuation of market-linked debentures: Sebi
The issuer of structured products or market-linked debentures (MLDs) will have to hire the agency for the valuation of such products.
NBFCs regain investor confidence, MLD sales back to pre-Covid levels
Power financier REC is set to become the first public sector company taking the MLD route.
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