As India moves closer to becoming an economic superpower, investors are increasingly hunting for alternative investments. These investments are outside the traditional investing environment, which helps you to augment your portfolio and protect your capital from potential financial downturns.
Alternative investment funds are a specialty financial tool gaining rapid popularity in the Indian financial industry.
With increased market turmoil, rising interest rates, difficulties, and a lack of faith in publicly listed assets and markets, investors are turning to alternative investments as a profitable investment avenue.
Alternative investments are privately held foreign or domestic investment funds organized as an LLP, corporate body, business, or trust. Simply put, they are investments in asset types that, unlike bonds, stocks, and cash, do not reflect the peaks and valleys of the regular market.
Alternative investments can help you broaden your portfolios while keeping your risks lower than traditional funds. It’s a simple method for first-time investors to get started, and it’s not limited to high-net-worth individuals or enterprises.
In this article, I will discuss the 9 best alternative investment platforms in India that you can use today to diversify your investments. But first, let’s understand what an alternative investment is.
Let’s look at the 9 best alternative investment platforms in India.
Grip Invest can be a handy investment tool for you if you are scared of taking risks.
We all want to invest and earn good returns, but most of us are hesitant because we fear the uncertainty of this market.
A distinct feature that makes Grip invest unique is that it is not linked to the market. So, it uses a unique mechanism that evaluates the risks on your behalf and ensures you receive good returns.
Unlike other asset investment platforms, the profits you get here are risk-adjusted.
Investment products offered by Grip are:
- Corporate bonds
- Lease financing
- Inventory Financing
- Start-up investment
- Commercial real estate financing
The return ranges between 8% to 21% in asset-backed investments. In comparison, startup investments have no return cap and work on high-risk-high-reward mechanisms.
Through Grip, you can invest in leases, merchandise, real estate, and even startup stocks. It provides detailed information about the investment you select, including its business agreements, returns, partnership, investment highlights, and possible risks.
You can invest in Grip with a minimum investment amount of ₹10,000 on financing products, whereas you will have to put in a sum of ₹2,00,000 if you want to enter its startup equity segment.
What fascinates me about Grip invest is its investor network; with over 2.5 million investors and a 0% default rate, it is one of the most used alternative investment platforms.
- Grip is very keen on picking the right project to invest in. To be listed on grip, a firm has to go through rigorous checks to ensure that the investor’s money is not wasted.
- They plan their investments by requesting a security deposit of 7.5 to 15% of the leasing amount, which is great.
- Investments available at Grip have nothing to do with the market volatility. It is unusual and unique, which attracts new investors.
- Each investor’s money is processed independently and not in a pool, which means you have control over the flow of investment you make on Grip.
- When researching this, I discovered that Grip had delayed some lease payments of a few inventors.
- Grip’s rate of return is quite deceptive sometimes. A user made roughly 8% returns instead of the stated 21%; that’s a lot of difference.
- Grip does not guarantee you any security over your investments.
Tyke is a cloud-based alternative investment platform that allows you to invest in private businesses.
You can use Tyke and invest in Startups. You can track funds and KPIs and overview portfolio performance through a dashboard.
Tyke has made raising funds frictionless, giving investors like us many opportunities to invest in promising startups. Tyke is also concentrating on automating investments in private equity.
Founders use Tyke to start an investment round, selecting the parameters and inviting investors to join.
Tyke also launched “Analytics,” a new platform that streamlines reporting by providing crucial information on the success of your investment.
It intends to diversify its products into asset classes related to fixed income and related debt instruments.
Tyke is great for retail investors because it provides a platform where anyone can invest directly into a startup.
The fundraising company decides the minimum and maximum investment amount; however, as per my experience, it generally ranges between ₹5,000 to ₹20,000, which is pretty reasonable.
- Type is simple to use and intuitive.
- Customer service is quite responsive.
- Many users have submitted a positive response after they used Tyke for the first time.
- Access to multiple startups.
- Tyke only has the CSOP and NCD model activated for investors.
- I feel the Tyke is currently not user-friendly, and you will have to dig through many documents to find relevant information, like the investment letter, etc.
Lendbox is an RBI-licensed NBFC – P2P lending platform. It launched in 2017 and is now one of India’s leading P2P lending platforms.
Recently, Lendbox has been redesigned, and numerous innovative services have been added for customers.
Lendbox has teamed with a few reputable organisations to provide investors with low-risk investing opportunities.
These businesses act as guarantors for the loans taken out by their retailers and channel members. You can expect an annualised return of 12% to 20%.
- Lendbox is a one-of-a-kind alternative investment platform that connects borrowers with investors eager to lend them money via an internet platform.
- From an investor’s standpoint, this is an excellent chance to generate significant returns on their investment.
- The transactions have no hidden fees.
- Registration is free, fast, and straightforward.
- It might be a little riskier than the other alternative investment platforms since it is P2P.
The next platform on my list is Tradecred. It is an investment platform that operates solely on one investment option, invoice discounting.
You can consider this as an alternative to the debt market.
Companies use invoice discounting as a form of fundraising strategy. They obtain small sums of money from regular investors in the short term. Tradecred uses its platform to make such investment options available to basic investors like you and me.
TradeCred allows businesses to post their invoices on its site. Then, you can purchase a piece of the transaction or the full offer based on their preferences. Each of these transactions has a start and end date.
When the transaction is completed, the firm will pay the investor his money plus interest for the duration of the transaction.
To join TradeCred, you must have a valid phone number connected to your Aadhaar card, PAN card, and a working bank account. Through Tradecred, you can get up to 12% yields on your investments.
- They offer ease with which you may begin and manage your investments.
- The system’s competent management and maintenance personnel can transform it into a formidable and safer solution.
- Some potential investors may be unable to afford the minimal investment.
- There is a significant risk.
Jiraaf is a Fintech platform that provides retail investors with alternative investment solutions.
It claims to outperform fixed deposits in terms of returns. Although investing in Jiraaf is slightly risky, the overall returns are equally rewarding.
Jiraaf introduced Indians to novel fixed-income instruments like covered bonds, leases, and invoice discounting.
Jiraaf mainly offers three products:
- Invoice discounting,
- Lease and inventory finance
- Non-convertible debentures.
But how much income can you make with Jiraaf?
This will vary depending on the product you choose.
As per my research, the leasing finance product provides the best returns, which can provide gross returns of up to 17-18%. It can account for the post-tax income of up to 11-12% yearly.
In the case of NDC and invoice discounting, the gross returns can go up to 10-15%. Your tax bracket will determine your post-tax returns.
- You can diversify your investments across several asset groups.
- You earn more than standard fixed-income investments.
- They do the legwork to make investing simple for you.
- In only 3 minutes, you can open an account and start investing.
- The risk is slightly higher.
- Jiraaf takes no guarantee for returns.
Wint Wealth is a fintech firm that offers you the opportunity to purchase high-yield (9%+) debt instruments (such as Covered Bonds/MLD) with better security.
The continual reduction in fixed-income yields has resulted in the growth of Wint. Because it is a secure and reliable fixed-income instrument, a Senior Secured Bond is similar to an FD. However, they generate significantly larger yields than FDs, totaling 9% to 11% on average.
It has been one of the fastest-growing alternative investing platforms in the past few years.
Wint Wealth sells senior secured bonds from different companies directly to consumers. It has developed covered bonds for individual investors, which provide more security.
Opening an account with Wint Wealth is completely free. You must first hold an account with a SEBI-registered broker to create your account. They will cut your interest rate by around 2% in the event of commodities with a fixed interest rate payback of 12-14%.
- Because of its diversity, Wint ensures that you are shielded against unanticipated stock market disasters.
- Wint Wealth bonds provide rewards over a shorter period, only two years.
- Bonds available through Wint’s platform are routinely listed on the stock market.
- According to reports, several people have been scammed of several thousand dollars.
- You will have to take the risk of total loss if the business takes that loan and fails.
LiquiLoans is a P2P lending platform that uses cutting-edge technology to link creditworthy applicants and lenders based on risk tolerance.
Indians have historically been fixed-income investors, with approximately 70% of their financial savings invested in fixed-income assets. Most bank savings accounts currently give only 2.5-3.5% in the present low-return environment, which is the target audience of LiquiLoans.
LiquiLoans offers a unique solution that allows you to earn 8-10% returns on your investments while maintaining quick liquidity and consistency. It is thus an excellent product for saving short-term funds, which is better than liquid funds/saving accounts/FDs.
They do not impose fees on investors or borrowers because the expense is passed on to the partners that source loans.
- The firm does not charge the consumer interest.
- LiquiLoans may attract highly placed borrowers with average yearly earnings surpassing Rs. 8 lakhs through partnerships.
- Because the end-use of money is carefully stated, borrowers with fraudulent intent are automatically sorted out, considerably lowering the chance of default.
- The minimum investment is $50,000, which is a significant amount.
AltiFi is a cutting-edge investment platform that allows individual consumers to buy fixed-income assets.
It provides securities that were previously exclusively available to investment firms, retail investors, wealthy individuals, and HNIs.
Altifi allows institutions, HNIs, and individual investors to acquire bonds and deposit certificates from rising firms across many industries.
It is a subsidiary of Northern Arc Capital, a well-known finance, syndication and structuring, and wealth management organization.
Because it exclusively offers bonds subscribed to by its parent business, Northern Arc, Altfi is not a sheer spot marketplace. This platform focuses on bonds issued by firms with solid credit, and Northern Arc has confidence in underwriting.
Bond yields vary from 8 to 13%. Aside from bonds, tax-efficient structures such as MLD are also common.
Once enrolled with Altifi, you must enter your Demat account information, which might be NSDL or CDSL. The KYC clearance procedure is quick, and you may buy bonds within 24 hours.
You may buy bond units via net banking or UPI, and they will appear in the Demat account within two days.
- Registration is fast. I was able to buy my bonds in 24 hours.
- The customer service was also top notched. They were swift to reply to any query.
- Bonds may take more than two days to appear in your Demat account.
- The KYC procedure may be stressful for some users.
KredX describes itself as a provider of supply chain finance solutions.
It was founded in 2015 and has added several products for retail investors and companies.
KredX offers finance and cash flow management to corporations and small enterprises. It also offers Buy Now Pay Later (BNPL) services for B2B transactions, bill discounting, import-export financing, and many other products.
They just released the KredX Cashback Card for vendor payments in collaboration with ICICI Bank, which provides cashback/rewards on vendor payments.
The KredX team consists of founders and team members with extensive expertise in banking, finance, and other fields. Tiger Global, Sequoia, and Prime Venture Partners are among KredX’s prime investors.
- It allows ordinary investors to participate in invoice discounting transactions.
- KredX offers a seamless onboarding procedure and allows investors to diversify across asset types.
- Registration is quick and simple.
- KredX is secure, with no recorded defaults in recent years.
- You will not be able to see any information related to the rate of returns until you register your account.
- Only limited options are available for retail investors.
So, these were the 9 best alternative investment platforms in India which are famous and used by millions of customers.
Platforms like Jiraaf, Grip Invest, Wint Wealth, and Tyke are great places to start your alternate investment journey. These investment platforms have a good customer base and are known for doing what they claim.
Not financial advice, but what I generally do is, instead of placing my money in a single alternative investment fund, I spread it across multiple investments. I start with a lower amount, and when I feel I am getting decent returns from a particular platform and their figures are trustworthy, I tend to increase my bet size.
That was all for today; these alternative investment funds offer a great way to generate passive income. However, I must say you, as an investor, must conduct thorough research and never rely on figures shown on any investment platform’s website.