Kotak Cherry offers up to 10% interest rate on corporate bonds

According to the investment platform, it is offering Kogta Financial India Ltd’s secured non-convertible debentures on discount between 1 and 7 July at 10% internal rate of return (IRR). Post the offer period, rates will drop to 9.5%.

As per Kotak Cherry, Kogta is an exclusive and curated bond, which is not available on any other platform. The bond offers double digit for tenor of 2.5 years and 10% of principal is also returned every quarter.

The bond has been rated ‘A’ by rating agency Icra Ltd. As per experts, this rating means that the issue carries low credit risk but are not as safe as AAA-rated instruments.

Currently Kotak Cherry on its platform only offers two bonds – Kogta and IIFL Finance Ltd. (currently not offering any discount and is offered at 8% yield).

Srikanth Subramanian, chief executive officer-designate, Kotak Cherry said, “Volatile market has created uncertainty among investors and they are looking at bonds for safety. We felt it’s an opportune time to reward retail investors and pull them towards bonds and bond market. Bonds come in with reliable amount of certainty and offer higher returns than fixed deposits as well as offers lower risk than equities, however, selection of the right bond still remains the key.”

Kotak Investment Advisors, a subsidiary of Kotak Mahindra Bank, had launched Kotak Cherry early last month.

The platform offers investing solutions to users via a digital app backed by investment managers. It provides investment solutions ranging from stocks, bonds, mutual funds, fixed deposits and National Pension Scheme (NPS) to other investment opportunities like exchange-traded funds (ETFs).

As per the company, Kotak Cherry is enabled as a Do It Yourself (DIY) execution platform. Going forward, it is also expected to offer financial life-stage solutions like stock baskets, robo advisory, life-, medical-, general- insurance, and enable international investing.

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