What are Securitised Debt Instruments (SDIs)?
SDIs are SEBI-regulated fixed-income instruments backed by a pool of loans and cash collateral. As an investor, you earn returns from the cash flows generated by these underlying assets.
What is LoanX?
LoanX is Grip's SDI product. It allows you to invest in a diversified pool of loans — including MSME, consumer, and business loans — originated by established, credit-assessed NBFCs.
How do SDIs work?
A pool of assets (such as loan receivables) is bundled and converted into securities through a SEBI-regulated Trustee. Investors receive regular payouts — interest and principal — from the cash flows generated by those assets, as per the payout schedule.
What types of assets back SDIs?
SDIs on Grip are backed by: loan receivables (LoanX) or invoice receivables, and other financial assets that generate regular cash flows.
Why are SDIs issued?
Companies — typically NBFCs or financial institutions — issue SDIs to raise capital by monetising their existing assets, improving their liquidity without taking on fresh debt.
Who is the originator in an SDI?
The originator is the entity (e.g., an NBFC) that owns the underlying assets and transfers them into the SDI structure. The originator continues to service the asset pool and ensure collections.
How are SDIs different from corporate bonds?
SDIs are backed by a pool of assets — your returns depend on how those underlying assets perform.
Bonds are backed by the issuer's overall creditworthiness — your returns depend on the issuer's ability to repay.
SDIs generally offer a periodic principal repayment in addition to the interest. Both offer fixed returns, but the risk structure and payout schedule differ.
How do SDIs generate returns?
Returns are generated from cash flows — loan repayments or invoice collections — from the underlying asset pool. These cash flows are passed on to investors as periodic payouts.
What returns can investors expect from SDIs?
SDIs typically offer fixed, predictable returns — often higher than traditional fixed-income products like bank FDs — depending on the risk profile of the underlying asset pool.
Are SDI returns fixed or variable?
SDI returns are generally fixed and pre-defined at the time of investment, based on the expected cash flows from the underlying pool. However, actual payouts can vary if underlying loans have a prepayment. Always check the return schedule of each deal before investing.
What happens at maturity?
You receive the remaining principal along with the final payout, and the investment is closed. All returns are credited directly to your registered bank account.
What risks are associated with SDIs?
Key risks include: credit/default risk of underlying borrowers, delays in cash flows, and limited liquidity (selling before maturity is possible but not guaranteed).
Who regulates SDIs in India?
SDIs are regulated by SEBI. In certain cases, the RBI's frameworks also apply — particularly where the originator is an NBFC. SEBI-registered trustees independently oversee the structure.
What happens if borrowers default?
If underlying borrowers default, payouts may be delayed or reduced. Recovery depends on the structure, the security cover, and the performance of the asset pool. This risk is disclosed upfront for every SDI listed on Grip.
Are SDIs secured investments?
Yes. SDIs are typically backed by underlying assets, and most structures include additional safeguards such as trustee oversight, security cover, and credit enhancements — designed to protect investor interests. However, the returns are not guaranteed.
Can SDIs be sold before maturity?
Yes. SDIs are held in demat form and can be sold via the exchange by placing a sell order (available for Grip demat account holders). However, finding a buyer at your price is not guaranteed and depends on market liquidity.
How are SDI returns taxed?
Interest income — taxed at your income slab rate.
Capital gains (if sold before maturity) — taxed based on your holding period (<=12 months: slab rate; >12 months: 12.5% flat).
Principal repayment — not taxable.
Is TDS deducted on SDI payouts?
Yes, TDS at 10% is deducted on interest payouts.
Is there an exemption on TDS deduction?
Under the new Income Tax framework, Form 13 is being replaced by a new consolidated declaration form, Form 128. This new form is intended to streamline the process for declaring eligibility for non-deduction of TDS.
Accordingly, going forward, all users whose gross income is under INR 4 lakhs are required to submit Form 128. Reach out to support@gripinvest.in for more information.
