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Stay away from high yield debt products. There are no free lunches in Finance. Returns greater than the risk free rate, don't come risk free at all, let alone being 100% safe.
It's a covered debt. I feel it's quite risk mitigated with assets of higher value to liquidate held with Bonafide banks in case of defaults.
What are the risks you see?
These are non-convertible debentures issued by IIFL. If IIFL defaults, they say that the common pool of assets which are transferred to a trust is responsible to pay you. If they are paying you 11% and Wint wealth is getting 2% commission and NBFC needs to make money too on top of this. You can imagine what type of people get this high interest debt with gold or vehicles as a security. My concerns are firstly, Concentrated credit risk with only one NBFC. Liquidity is also a major concern given that in case of a default they have to sell the vehicles and gold and I don't know how situation will pan out if there are large no. of defaults, given the current situation. Also, they say that 1.3x is the common pool, but we don't know how they value this.