He believes that this step will not only unlike the cost of low international funds for large Indian corporators – whose ratings are often closed by sovereign levels – but also attract the flow of more foreign portfolio in the bond market.
The yield of the government’s bond is already coming to the news, with Goenka looking stronger in the landscape of the global emerging market investment, which provides more risk-bilized returns and fresh opportunities for fixed income investors. Edited quotes –
Q) Can this rating upgrade lead to a re -rating of Indian corporate bonds, and if so, which segments or fields benefit the most?
One) “The international country ratings cap ratings of big Indian corporates. Now, as sovereign ratings are upgraded, the cost of international funds for Indian companies will decrease. This will gradually lead to lower cost of funds for companies.”
Being a circle around the rating upgrade your questions, I am sharing Vishal’s comment on the S&P upgrade shared earlier yesterday:
Q) After this upgrade, what changes can fixed-income investors expect in foreign capital flow in India’s debt market?
One) India was only upgraded by S&P from a steady point of view in BBB. The government bond market is focusing on these news, as these bonds will promote more foreign and FPI flow in the markets.
Due to the risk-compulsion, the credit rating systematically invests more in the country. We see that India is left in the global spotlight for the emerging market -friendly wealth and in the short term for bond yields.
Q) After the RBI’s policy policy, will you see a further reduction in the remaining financial year 26 and why?
One) The RBI kept the repo rate 5.50% in August. July CPI was 1.55%, which is multi-year low. From here, the policy is likely to pause data and make a track.
The direction and time of any step in the US Tariff will also be shaped by the result and global policy, especially by the US in September.
We think that there are definitely 25 bps on the cards of FY 26 and we live in a multi-ray or stable interest rate atmosphere.
Q) How should investors place themselves in a portfolio of fixed income amid rates and geographical political concerns?
One) First, considering equity instability and ongoing indefinable geographical political instability, the allocation for fixed income in the overall portfolio should now be high.
Within a fixed income, staying in the short end of turns and investing in maturity of 2-3 years, high yield corporate bonds will provide regular and compatible returns from 8-12%, depending on the risk of hunger and investment.
Prolonged maturity bond prices have dropped and now it yields better, so a portion of the portfolio for government securities in this segment can be considered. The final mixture matches your risk relaxation, cash requirements and tax situations.
Q) If there is an anti-risk investor and wants to deploy ₹ 1000,000 — what would you recommend? Please give a percentage split.
One) An indicator split for a chich profile of Rs.
40% (2-3 years) in AA+/AAA Corporates
25% in long G-SEC/SDL (10 years and more)
20% in ~ 1-year FD for liquidity
Carefully selected, up to 15% in high-yielded corporates (2-3 years) listed
Use this as a starting point. Eligibility is based on tax slabs, existing portfolio holdings and cash-flow needs.
Q) How can the right balance between bonds, equity and hybrid instruments amid a changing market mobility?
One) Asset allocation and portfolio construction is individual and originated from the basic factor of investors’ appetite and external factors such as global uncertainty and domestic slump in credit growth.
Given the current uncertain equity and growth point of view, investors can plan about 40% equity / 40% fixed income / 20% gold. With the RBI on the repo rate cut breaks, a lateral potential rate in FY 26 and a multi-year low CPI of 1.55%, more allocation for fixed income currently enables stable returns and ‘waiting’ view towards stable returns and equity.
Q) Can corporate bonds provide ₹ 50,000 of “pension” per month? Which corpus is needed?
One) Depending on the risk of risk, bonds currently offer anywhere between 7% and 12% return. Every month, the need for allotment to earn 000 50,000 (LAKH 6 lakh in one year) will depend on the AAA ratings to BBB ratings.
With monthly payments or regular payment options, the required investment can range from LAKH to 50 million to LAKH 85 lakhs. A balanced approach aiming for about 9% return can help this target achieve about LAKH 66 lakhs invested in corporate bonds.
(Connection: The recommendations, suggestions, views and views of the experts are their own. This does not represent opinions of economic time)
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