• Hey there! Welcome to TFC! View fewer ads on the website just by signing up on TF Community.

[Discussion] Mahindra Finance Fixed Deposit

dvader

TF Premier
My uncle just asked me about Mahindra Finance FDs (I wouldn't touch an NBFC with a 10-foot pole). My question is why the hell are NBFCs allowed to call their investment product "Fixed Deposit". This is completely deceptive and will be missold like hell to less Finance/tech-savvy people. I suppose it's not insured with DICGC which makes it like a lock in mutual fund, cuz I wouldn't trust a single thing these NBFCs say.

Is there any law against calling these investments Fixed Deposit? or is it the lack of a law that these NBFCs are exploiting to loot common people?
 
In my opinion, Mutual Funds n Index Funds are meant for passive investors - who have money, but no time. And, want market returns but not willing to take risk. They want safety n liquidity and are not averse to less returns.

These does not fit into my scheme of things. So, no investment in these two segments.

Why should I pay for highly inexperienced chaps - called fund managers - who always fleese your funds ? I trade directly n invest directly. No brokers, no advisors, no RMs, no PFMs.
 
Thank you for saying that. Precisely what I have been trying to convey.
If you want to let your money make money for you, you need to put in the time yourself. Otherwise, find ways to turn your sweat equity into more money.
This is in line with what you were trying to convey, so we were pointlessly arguing. 😀

Overleverage story is just noise. What are you supposed to do until that ONE DAY? Sit on the sidelines? I guess not. The world has seen enough crisis. Yet here we are. There will be several more to come. That is a fact.
Post covid global debt has surged to dangerous levels, and most economists agree. It has already begun, with all the low-income nations falling first.
You're saying this is noise. But will come to a point where you and I or any individual won't be able to do anything, but will have to do what you suggested not to do, ie, sit on the sidelines and watch it all unravel. Anyways, what action can you take to remedy such a situation?
 
What? I don't think it's fair to draw a comparison between the two, as that was a different thing altogether. The underlying asset(real estate) was heavily inflated at the time. And at the rate those subprime mortgages were rolled out, it was bound to happen. Especially, when they were carelessly giving loans to delinquent people!
AAA-rated bonds that are secured and have seniority are the golden standard. To be more safe, you can buy into any of the PSU bonds. Basically, they are the least risky bonds that you could invest in.
But if shit hits the fan tomorrow, as per the order of repayments, since the bondholder holds seniority, they would be entitled to the settlement first after the liquidation of the assets(as it is secured/backed by the asset).
Having said all that, yes it is risky. That's why you split your investment across multiple bonds(maybe 8-10), just like a debt MF would, to mitigate some of that risk.

M&M Fin tumbles 8%​


Pvt NBFC are not for debt investments.
 
Or, it may be due to ex-Dividend date or ex-Record Date. Or, even due to stock split or Rights issue related announcements or even due to percieved impact of acquisitions of another firm. Or, based on simple unconfirmed rumours.
 
credit card usage their is highly of rupay cards because in tier 3 and below pos arent there
so card penetration isnt that much
but yes somewhat easy access to finance has led to overselling of products based on pent up demand
buinsesses that boomed and people who made money in stock markets
they were spending lavishly and with access to emis and all for some time they were able to service their debt.
now with rise in interest rates poeple there do not have white collared jobs who get paid on a monthly basis and over a period of time when you are not able to service your debt
the lenders asset quality is going to detoriarte
 
atleast in india it seems to be the golden age of private credit
pent up demand is so strong people are taking loans at 15-16% which is drastically absurd because the cost of breakeven would go as high as 18-19% after all charges
and i am wondering which economic activity is yeilding that kind of returns
all for social media likes and status. Fake new rich
 
they get their cuts. its not their money. Did u read ILFS debt saga
Look it’s needless to any that investing in corp debt is not for everyone. I’ve been doing it for years and I’ve lost nada. I agree there were a few mishaps with DHFL, IFFS and other AAA rated bonds in the past. But those were all housing finance or infra finance companies. And I don’t invest in any companies in that sector and I don’t advocate anyone to do so.
 
the problem is everyone is blindly investing in instruments following the herd.
that's what happened with equity then derivatives now debt.
A senior citizen who has no idea what a AT BOND is will obviously invest in it without reseraching about it when told it is safer than a FD and more senior debt compared to others
 
the problem is everyone is blindly investing in instruments following the herd.
that's what happened with equity then derivatives now debt.
A senior citizen who has no idea what a AT BOND is will obviously invest in it without reseraching about it when told it is safer than a FD and more senior debt compared to others
The entire world is in a peculiar state right now. And I am saying this as a matter of fact not just cuz I am an Indian. Call it coincidence or good luck India's current social, political, and global standing is quite unprecedented. The population is exporting goods and services to the world even when there is pressure in foreign markets. People want to invest and logically we get to the current golden age of credit. I know it's a pipe dream but If the interest rates were low this would be a perfect world.
 
golden age of credit wont last long if real wages dont increase or rates dont decrease because at the current rate our savings to gdp is at a 40 yr low
.it wont be months or years before number of indians in debt increase and they asset quality if lenders decrease
Ohh yeah the age old saga, we gonna get F-#$ed within a decade.

England is witnessing the same fate we would see within a decade.
 
the problem is everyone is blindly investing in instruments following the herd.
that's what happened with equity then derivatives now debt.
A senior citizen who has no idea what a AT BOND is will obviously invest in it without reseraching about it when told it is safer than a FD and more senior debt compared to others
My 77yr old father-in-law, whom I consider to be quite sensible in financial matters, is stuck with 1Cr worth SIFL and SEFL NCDs. When I asked him why he invested in these in the first place, all he had to say was "someone recommended it".

In my opinion, the tiny incremental benefit in these kind of instruments is just not worth the risk involved.
 
Back
Top