List of Unlisted Bonds

Unlisted Bonds, as the name suggests, are not listed on any recognised stock exchanges. They are privately sold to investors, including family offices, HNIs, and institutional investors. Unlisted bonds can be bought and sold more easily than listed bonds but may be less liquid.

• Higher Yields: Unlisted bonds often offer higher yields since they are generally issued to a limited number of institutional investors who negotiate the terms and conditions with the issuer.
• Flexibility: Unlisted bonds' conditions of purchase can be altered to suit the particular requirements of investors. Issuers might offer a variety of maturities, payment intervals, and other features to attract investors.
• Lower Costs: Since unlisted bonds are offered directly to investors, there are no middlemen like brokers or underwriters to contend with. Lower issuance costs may come from this, and larger yields may be offered to investors.

Before investing in unlisted bonds, you should carefully assess your investment goals, risk appetite, and liquidity needs. You should also do in-depth research and analysis to ensure your investments align with your objectives.

• Limited liquidity: Unlisted bonds are not traded on public exchanges, so it may be more difficult for investors to buy and sell unlisted bonds. Moreover, the prices of these bonds may be more volatile.
• Reduced transparency: Unlisted bonds are not subject to the same level of regulatory scrutinisation as listed bonds. As a result, there may be less information about the issuer of an unlisted bond, making it more difficult for investors to assess these securities' credit quality and risk.
• Increased credit risk: Since regulatory bodies do not assess unlisted bonds, they may have lower creditworthiness than larger, publicly traded entities. Hence, unlisted bonds may have a higher default risk than listed bonds.

The terms and conditions of the bond document determine the resolution process for unlisted bonds. Investors can approach the issuer to seek a resolution. The company may restructure the debt, offer a settlement, or initiate legal proceedings to recover the money. Bondholders can initiate legal proceedings to recover the money if the company fails to honour its commitment. This may involve approaching the Debt Recovery Tribunal (DRT) or initiating insolvency proceedings under the Insolvency and Bankruptcy Code (IBC).

You must consider various factors to ensure you make the right investment decision. Here is a detailed guide on key factors to help you choose the best type of bond to meet your investment needs.

• Risk Profile: Different types of bonds have varying risk levels. So before you invest, it is very important to assess your risk tolerance and choose a bond that aligns with your comfort level.
• Investment Horizon: Your investment horizon is another crucial factor while investing in bonds. If you require liquidity in the short term, you should invest in bonds with shorter maturities and vice versa. But remember that the longer the maturity, the more sensitive the bond price will be to interest rate changes.
• Transparency and Credit Quality: The bond market can be complex, and regulatory oversight ensures the transparency and fairness of the market. Unlisted bonds are not regulated, so you must assess their credit quality before investing. Ensure you are comfortable with the transparency and credit quality of the bond.

Irrespective of which instrument you are investing in, being vigilant about its features and ensuring that it matches your risk-taking capabilities is essential. Check out these bonds if you want a higher fixed return on your investment and security.