5 Emerging Investment Options For Retail Investors In India 2023

Retail investors are individuals who want to secure their future by investing a part of their income to earn returns in different equity investment options like shares and mutual funds.

There are digital retail alternative investment platforms like Grip that bring freshness to retail investment. The retail investor’s basket is now filled with a choice of great investment alternatives. From high-risk to low-risk investments, the year 2023 seems like a profitable year for the tech-savvy investor. So, while you already know about mutual funds, let’s learn about the five emerging investment options for retail investors in 2023.

1. Corporate Bonds

Investors who purchase corporate bonds are lending money to the corporation issuing a bond as debt security. In exchange, the business agrees to pay interest on the principal when the bond matures in the short term. Corporate bonds involve high investments.  

To understand it better, let us consider the following example -

Let us say a company has issued a bond with a face value of ? 2,000. The maturity period of the bond is 10 years and a payment coupon of 6% p.a. Thus, on a fixed date every year, the company will pay you 6% on your invested amount, i.e ? 72, and return your principal amount on completion of the maturity.

Common investors do not find an opportunity to invest in these bonds as A+ bonds are sold to high-worth investors owing to their high-ticket sizes and low risk, even before the common investor can reach them. Bonds are now available through retail investment platforms at affordable rates.

2. Startup Equity

Equity often means ownership interest. One way that equity is expressed in business is through stock. However, one can own equity in any asset such as startups. Simply put, owning stock in a firm means you have a stake in the enterprise you are assisting to establish and expand. In the same way, you are also incentivized to grow the company’s value similar to the founders and investors.

For example, let us say two founders - X and Y are holding 5000 shares each with 50% of the controlling interest. In addition, they invite a third investor Z for a further investment of ? 10 lakhs, helping in further growth. 

Now, based on the post-investment ratio, the number of shares will increase proportionally. Subsequently, the founders and the investors can mutually gain from the ratio of investment. While the founders can scale their business, retail equity holders in the startup will be rewarded with handsome returns. 

3. Inventory Financing

Inventory roughly refers to all the stocks at different stages of production and is a current asset in accounting terms. By maintaining inventory, manufacturers market or produce goods with their funds. Retail inventory financing helps them  maintain inventory without blocking funds. 

Now, let us assume that a fashion retailer operates on a seasonal schedule. Its fast-fashion nature demands a continuous supply of inventory of both raw materials and finished goods. 

With retail inventory financing, companies can use the fund for procuring inventories and scale faster. Retail investors can gain fixed low-risk steady returns on their investments.

4. Commercial Real Estate

Commercial real estate (CRE) is property used for business-related activities or commercial rental spaces. The IBEF (Indian Brand Equity Foundation) research indicates that the real estate industry in India is anticipated to contribute 13% of the nation's GDP by 2025 and reach US $1 trillion by 2030. So, retail investment in this product makes a lot of sense.  

Commercial properties developed by top developers are using retail platforms, where investors can participate through fractional retail investment. With low initial investments, which are otherwise quite high if done directly, commercial properties are scaling with steady funds. Retail investors are receiving quarterly rental income proportionate to the invested amount. 

5. Asset Leasing

This is a new and modern investment option available for retail investors. It is a contract between investors and the company where they lease equipment like vehicles, machinery, furniture, computers, and more. Leasing and investing is a contractual agreement between:

Individual to Company

or 

lessee (the company inviting the lease) 

lessor (owner or investor in this case) 

To understand it better, let us consider the following example: 

A bike manufacturer invites investors to lease a plant for assembling bike parts for 13 months. With the retail funds, the manufacturer scales production, in return, investors earn fixed non-market linked monthly amounts. 

Conclusion

In 2023,  look for alternative investment options with Grip  that help you earn better than traditional investments. These are less risky with steady growth compared to high-risk investments. Invest low to earn more, get excited as you see your money multiply, and be a pioneer in thinking differently and making others follow this unconventional investment platform. If you want the best investment plan with high returns for retail investors, reach out to us.