AltX

07/08/2024

02/07/2024

Rule of 72
The rule of 72 is a simple concept to determine the period in which the investment amount will double, given the annual rate of return. Divide 72 by rate of return to know the period in which the amount will double. This is true in case the interest (fixed rate of return) is compounded.
Example: If rate of return is 12% p. a., then the money will double in (72/12) 6 years. With 10% interest rate, it will take (72/10) 7.2 years to double the money.
In case of 12% interest rate, with investment of 100 rupees

The interest for year 1 is: 100*(1+0.12) = P*(1+R) = 112 rupees

year 2 is: 112*(1+0.12) = P*(1+R)*(1*R) = 125.44
year 6 is: 100*(1*0.12) *(1*0.12) *(1*0.12) *(1*0.12) *(1*0.12) *(1*0.12) = 197.38
Thus, compounded amount at the end of ‘n’ years is: P * (1+R) ^n
P = Principal
R = Rate of Interest

Basic premises for the rule of 72:
1. Interest is compounded annually
2. Asset carries fixed rate of return
3. Re-investment possible in similar asset
The rule of 72 applies only on case rate of return id fixed. Hence, this rule doesn’t apply to equity investment as equity returns are volatile.

The period thus calculated is more accurate between 5% to 10% p. a. rate of return.

16/05/2024

Betterinvest: A platform offering investment opportunity in OTT content

Betterinvest is a platform which provides funding to production houses based on outstanding invoices. It approves the deal only in case movie rights are sold to OTT platforms like Netflix, amazon prime, Disney etc. and music labels like saregama and TIPS. The platform helps raise finance by discounting invoices maximum in the range of 60 – 70% of the contract value between production house and OTT or music label.

How does betterinvest work?

• Betterinvest verifies that the contract (between production house and OTT platform/music label for buying content rights) has been signed and production house has received first portion of the contract value (up to 10%)
• Once the contract passes all conditions, Betterinvest lists the deal on it’s platform (website) for investors
• A deal pools funds from hundreds of investors for a specified content of a production house with a specific tenure at fixed rate of interest

Opportunity

Betterinvest lists opportunity with specified tenure. It raises funds from number of investors. The opportunity is equally available to people from all levels of income.

Minimum Investment Amount: INR 50,000

Rate of Interest: 16.5% – 18% p. a.

Tenure: ranges from 1 – 10 months

Repayment: Principal + Interest is paid at the time of maturity

Tax Deducted at Source (TDS): 10% if interest amount

In conclusion, Betterinvest offers short to medium tenure fixed interest investment opportunities on it’s platform. The return offered is exciting to the investor along with the layers of risk mitigation.

Risks and Mitigation:

Betterinvest puts pre-determined conditions before approving/listing an opportunity on it’s platform
1. The production of a Movie/web series/music album must complete to the extent of at least 50%.
2. There must be established relation between OTT (Rights buyer) and production house.
3. The production house should have a pipeline of content production.
4. Only invoices raised on big OTT platforms or music labels are discounted.

The above pre-determined conditions filter out risks like non-completion of content, litigations and probability of default. In addition to this there is additional security obtained by the platform (betterinvest) in the form of

• Direct Collection Letter – An agreement signed by all 3 parties (Production house, OTT platform and betterinvest) that OTT will pay outstanding invoice amount in an ‘escrow account’ (to be paid to the investors first).
• Post Dated check – Betterinvest acquires post dated checks from production house as a security
• Personal guarantee -
• Claim on proceeds from other content of the production house in case of non-receipt of invoice amount for any reason.

There are a few small limitations to this investment opportunity:
1. Only round amount can be invested, hence interest earned can’t be invested in next opportunity – this takes away the opportunity of compounding.
2. The amount is credited to investor’s bank account directly, which requires bank transaction at the time of reinvestment

Betterinvest is working on a wallet, where the proceeds will be credited at the time of maturity. The second limitation will be overcome with the wallet shortly.

23/04/2024

Invoice Discounting and opportunities in alternative investing

Companies need funds for continuation of operations. ‘Invoice discounting’ is cheapest and fastest way of making funds available.

What is invoice discounting?
‘Invoice discounting’ is a method of raising working capital finance by way of advance against unpaid invoices.

In a nutshell, invoice discounting means, selling invoices to a third party (financial institution), accepting only a portion (80% - 85%) of the invoice amount in advance. The amount of invoice value is recovered later by the lender from buyers. This allows the businesses to free cash from unpaid invoices.

Bankers have been providing invoice discounting facility to businesses for years. The emergence of Fintech platforms has revolutionized invoice discounting. Fintech platforms are enabling companies of various sizes and industries raise funds by discounting invoices. Technology is leveraged for due diligence of invoices, buyers and sellers including the contracts.

The technology used by Fintech platforms helps to fractionalize the investments opportunity to pool smaller amounts of investment by number of investors.

Features of ‘invoice discounting’ opportunity on FinTech platforms -

1. Shorter duration (1 – 11 Months)
2. Higher returns (16% - 18% p.a.)
3. Minimum investment of as little as INR 1,00,000
4. Repayment of principal & interest at maturity

Type of risks and possible implication –

1. Delay in repayment of invoices – This can amount to delay in repayment of investment amount. However, platforms do pay the interest for extended tenure.
2. Buyer denying repayment of the invoice due to dispute – This could result in loss of complete or partial principal or interest.
3. Invoice discounting is a junior debt instrument, as it is a working capital fund (operational debt). Hence in case of cash flow difficulty or insolvency of the borrower, the lenders for this debt will be paid last.

Remedies –

1. Lend money in a situation where, buyer is the established organization.
2. The products should include invoices from only a few buyers. Too many buyers may increase difficulty of recovery.
Last but very important is
3. Allocate smaller portion of total investment to ‘invoice discounting’ opportunities.

In conclusion, invoice discounting is the opportunity made available to investors by FinTech’s. Individual Investors are benefited from fractionalization. Firstly, it is possible to invest with minimum INR 1,00,000. Secondly, it is possible to allocate only a fraction of total portfolio to this investment opportunity.

23/04/2024

FinTech Growth

Indian population started getting used to online payments since the launch of Paytm payments in India around early 2010s. Utility bills, kirana payments, cab payments, amazon purchases etc. started getting paid using Paytm wallet. Then 2016 demonetization gave rise to payments using Google pay, Bharat pay, Phone pay etc. Payments for making mutual fund investments, application for IPO, Payment to trading accounts all has been happening using UPI for more than 6 – 7 years now.

The growth in digital payments industry gave rise to the Fintech industry. InsurTech, PropTech and WealthTech along with payments form part of FinTech. The fintech industry is using latest technology like Artificial intelligence, machine learning, Natural Language Processing (NLP), Big Data, Artificial Algorithms, etc. for product structure and risk mitigation.

Everyone knows and have been exploring services offered by brokers when it comes to wealth tech industry. However, there are large number of WealthTech platforms offering services in form of fixed income opportunities like venture debt, invoice discounting, asset backed leasing, fractional real estate etc. A few platforms worthy of mention are altgraaf.com, betterinvest.club, as they have made significant contribution to the new form of WealthTech offerings.

These WealthTech platforms are offering fixed return opportunities that start with minimum investment amount of INR 1,00,000/-. Hence, FinTech can offer high yield opportunities for people from wide income range.

We all need to be more aware of developments in FinTech industry in order to be part of industry growth story. The industry is expected to grow due to more players, more structured products, ease of transaction and higher yield products.

23/04/2024

Alternative Investments

An Alternative investment is an investment in assets other than the conventional assets i.e., equity, debt and cash. Alternative investments can be in the form of tangible assets like precious metals, real estate, art, wine etc. or in financial asset such as private equity, distress securities, venture capital, hedge funds etc.

Financial alternative assets are more popular because they are held in paper form and can be more liquid than tangible alternative assets. In recent years, developments in digital payments, payment wallets, CKYC have resulted in many platforms’ offerings in alternative investments like peer-to-peer lending, asset backed leasing, invoice discounting, fractional real estate etc. The average rate of interest offered by the new opportunities is in the range of 12% - 16% p.a.

To sum up, the benefits of financial alternative assets include:

o Better liquidity
o Better returns
o Smaller capital requirements
o Opportunity to generate Passive income

Why Alternative Investment?

Alternative Investments are not correlated with conventional investments. Hence, the returns of alternative assets don’t move in the same direction as conventional investments. That makes alternative investments an essential asset class in a portfolio. An investor can consider investing in alternative asset class to as it offers:

1. Diversification – Provides diversification to multiple asset class and structures. Multiple assets like peer-to-peer lending, asset backed leasing, invoice discounting, fractional real estate allows investor diversify to personal lending (P2P), vehicle financing, real estate, leasing of machinery (asset leasing) etc.

2. Smaller capital requirement – The minimum investment requirement for various platforms starts with INR 50,000, which makes it accessible to larger population of investors. These are investment opportunities similar to FDs, postal schemes etc., with better returns.

3. Higher IRR – average returns offered by alternative investments are in the range of 12% - 16% p.a. IRR. This is a moderately high return compared to other fixed tenure investments.

4. Risk mitigation – The risk mitigation is done at multiple levels and types like diversification, pledging an asset, cash cover etc. The same are mentioned in the product details provided to investor by platforms. Platforms also use technology in various functions like due diligence, loan recovery, etc. for mitigating risks.

5. Faster Ex*****on – The process of KYC is OTP based in most of the cases, which helps investor to start investing within a few hours once the KYC is conformed. Multiple payment options like net banking, UPI etc. make the process seamless and faster. In a few cases, even payment through check is possible.

6. Demat securities - As the securities like NCD are in demat format, they are credited to the demat account of the investor. An investor can see the investment details in the CDSSL/NSDL statement till maturity.

Who can invest in Alternative investments in India?

Anyone who is above the age of 18, an Indian citizen and NRI can invest in Alternative investments. In a few cases, where the securities are in demat format, NRIs won’t able to invest.

In conclusion, any individual who invests in equity, mutual funds can invest for diversification and other fixed return investors can invest for higher fixed returns. Investors are recommended to evaluate and invest in alternative investment opportunities according to the requirements.


Listed below are a few examples of platforms offering alternative investment opportunities with different asset classes:

https://www.faircent.in/lender_registration_faircent_double?utm_source=wl&utm_medium=Mailer&utm_campaign=Lender_Partner&agf=WLA102653

Faircent is India's First RBI registered Peer to Peer Lending platform.
Minimum Investment - 25000
Avg Returns - 10% - 12%
Total Investment (In Crores) - 2000+

https://www.perannum.money/?referralCode=GLV6

P2P Loans, Invoice Discounting, Settlement Financing Opportunities
Minimum Investment - 10,000
Avg Returns - 10-14%
Total Investment (In Crores) - 2563+

https://www.altgraaf.com/signup?referrer=AK0109

All in one platform for Alternative Investment Opportunities-corporate bonds, invoice discounting, asset leasing, etc.
Minimum Investment - 100,000
Avg Returns - 12-20%
Total Investment (In Crores) - 3,147

https://www.betterinvest.club/

Invest in Movie Rights financing (Use Code - 3BMYBR)
Minimum Investment - 100,000
Avg Returns - 18%
Total Investment (In Crores) - 216

Invest in high returns secured debt assets

19/04/2024

Greetings of the year!

2024 has started on a very positive note with nifty 50’s rise of 15% in gone by calendar year (2023). Despite the market buoyance, keeping in mind the volatility of equity markets, we are bringing you a platform with attractive alternative investment opportunities.

Welcome to our platform ‘ALTX’ at the beginning of the year 2024.

The endeavor is to bring promising opportunities on the platform. The team works relentlessly to bring impressive opportunities of different structures (e.g. NCD, invoice discounting, corporate debt) and from different industries to reduce risk and expedite return.

Opportunities are fractionalized so that the larger population can participate and start journey of wealth creation. The tenure (principal repayment) of opportunities listed on ‘ALTX’ would range from 6 – 18 months. Also, interest repayment instances are different for every opportunity. The good news in this is, you will be able to invest in opportunities as per your own requirement of return, risk and liquidity.

Here is your chance to start your journey of investing in high return, fixed income investment opportunities. You can also check all your investment made through ‘ALTX’ in ‘My Investments’ tab at the bottom.

Excited to serve you the best!

Android app link :

https://play.google.com/store/apps/details?id=com.altxmobile.prod

IOS app link :

https://apps.apple.com/in/app/altx/id6449716801