You may make cash on-line by investing in autos, gear, furnishings leased to corporates – right here’s how – The Monetary Categorical

The Monetary Categorical

Most buyers in India are introduced with alternatives corresponding to mounted deposits, small financial savings accounts, mutual funds, inventory markets and even cryptocurrency. Whereas market-linked funding choices have a part of volatility and will need to have an applicable allocation within the portfolio, the mounted earnings choices don’t at all times provide actual inflation-adjusted returns. So, buyers aren’t left with many choices to construct a wholesome diversified funding portfolio. New age funding platform Grip Make investments is offering buyers with a possibility to diversify their portfolio by permitting them to entry high-yield, mounted earnings merchandise like lease financing or stock financing.
In an e-mail interplay with FE On-line, Nikhil Aggarwal, Founder and CEO, Grip Make investments shares particulars in regards to the funding platform and the related dangers. Excerpts:
Grip Make investments is a new-age funding platform that goals to behave as a market for a) buyers seeking to diversify their funding portfolio by investing in increased yield, asset-backed alternatives, and b) firms seeking to leverage lease financing and entry new types of capital.
Grip Make investments began operations amidst the pandemic in 2020 and provided lease financing as a product. We current a possibility for buyers to co-invest cash in leasing belongings – corresponding to electrical autos, furnishings, EV batteries, cloud kitchen gear, and many others. – via our platform. This is able to additional allow these firms to develop with out elevating fairness or debt however utilizing leasing as a type of progress capital. The buyers alternatively get mounted month-to-month returns.
Whereas Covid has thrown up many challenges it has additionally created many alternatives. With many firms a hybrid mannequin, co-working areas have turn out to be extra in demand. They permit firms to scale up and down seats as required. Co-working areas are splendid candidates for deployment of funds invested via Grip as they work on asset-light fashions and a co-working house supplier must shortly scale their presence.
One other instance is final mile supply – Covid has elevated ecommerce in addition to the hyperlocal supply phase. This has resulted in an elevated requirement for capex throughout the worth chain – extra warehouses, extra third-party logistics fleet, extra final mile supply fleet and many others. This has resulted in an enormous alternative for Grip.
Lastly, the rising adoption of EV has created a big deployment alternative for Grip. Within the subsequent 10 years, new OEMs will want manufacturing machines, operators will want fleet and there will probably be new charging gear that’s deployment throughout the nation.
If there may be one funding precept that 99.9% of individuals agree with, it’s {that a} diversified portfolio is nice. Every funding serves its personal function and buyers ought to select a mix that works finest for his or her risk-return urge for food.
Mutual funds and crypto have turn out to be particularly fashionable on account of (a) small minimal transaction sizes permitting everybody to take part (b) simplified digital funding expertise and portfolio administration.
Sadly, the identical has not occurred for different various asset classes particularly within the mounted earnings house. Each mutual funds and crypto are market-linked devices with excessive volatility. Grip is making such excessive yield mounted earnings funding choices out there to buyers by fixing each – low minimal ticket dimension and nice person expertise. Traders must also look to and never solely spend money on such alternatives to construct a more healthy and extra diversified funding portfolio.
The most important danger for the investor is that two occasions occur concurrently – (a) the corporate leasing the asset defaults on its funds and (b) the asset being leased can’t be recovered and monetized to get better worth. As each occasions need to occur for buyers to lose capital, the chance of capital loss is diminished. That is considerably completely different from unsecured company lending (like bill discounting) or P2P loans the place the financing just isn’t backed by any recoverable asset.
To additional defend buyers and mitigate the danger of default, Grip takes the next steps for every transaction:
Determine belongings and corporations for funding and assemble offers with leasing companions that meet our monetary and danger standards. Certainly one of our key standards is that the corporate will need to have a well-regarded PE/ VC investor, this ensures excessive requirements of company governance
Take a 7.5%-15% safety deposit at first of the transaction.
Guarantee accelerated month-to-month repayments such that 40-50% of the investor’s capital is returned inside the first 12 months of the funding.
Monitoring of the funding over the tenure and overview of the lessees monetary and working efficiency.
Constructed an ecosystem of elements for restoration of the belongings, re-sale, or re-lease. We’ve 70+ leasing companions and infact have our personal ecosystem to re-lease the belongings
We’ve already returned 26+ Cr in investments to our customers and never had a single default until date.
Our product is presently out there for resident and non-resident Indians. We’re concentrating on buyers, significantly from center and upper-middle class earnings teams, seeking to steadiness their portfolio. Traders can make investments as little as INR 20,000 via our platform.
Grip Make investments educates its clients on the varied alternatives that leasing and stock financing maintain for them. Nevertheless, the last word choice to take a position stays within the palms of the buyers. We don’t make any selections or provide any assure. We provide a platform the place buyers can come, assess the alternatives, and make funding selections.
Our buyers can make investments as minimal as INR 20,000 for a pre-tax IRR of 20%+. One other manner to have a look at the returns is that in the event that they have been to maintain their cash invested in belongings on Grip, they’d have a pre-tax annual yield of 20%.
Each funding alternative we curate and current on our platform presents completely different returns. Earlier than continuing, buyers can view detailed details about all of the energetic leasing alternatives. In addition they have the choice to calculate the returns they’d obtain on a selected funding.
Is it authorized to take a position via Grip Make investments?
Sure, it’s authorized to take a position via Grip. We’ve taken opinion from a few of India’s finest recognized regulation corporations on the funding construction and the rules governing our enterprise. The truth is individuals from the authorized and CA occupation are a few of our largest buyer bases!
The final 15 months have been an unimaginable journey for Grip Make investments. We constructed a neighborhood of 150,000+ buyers (consisting of resident and non-resident Indians), making investments from 322 cities in 42 international locations globally. Furthermore, we’ve facilitated the leasing of belongings price INR 150 crore.
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