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Perpetual Bonds: Understand Its Meaning and Working

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Synopsis:

Perpetual bonds are the bonds that are issued on a perpetual basis. Simply put, these bonds do not have a repayment date. Hence, their issuer does not have to pay the principal back to the investors. Instead, the issuer pays interest on such bonds forever to the investors. As these bonds are issued on a perpetual basis, only those investors who invest for an extremely long period should consider investing in them. Such bonds are mostly issued by the government, government-related agencies, banks, and some corporations.

As the name suggests, “perpetual bonds” are issued on a perpetual basis. The issuers of such bonds do not pay the amount originally invested in them by investors back to those investors. However, the issuers pay interest on them forever to the investors.

Therefore, you should invest in such bonds only if you are comfortable with the idea of receiving a fixed interest forever and you are fine with your principal never coming back to you.

Typically, such bonds are issued by the government, government agencies, banks, and a few corporations. They are a niche instrument. Hence, only a few organisations issue them and a few investors invest in them. Read this blog because it explains the meaning of perpetual bonds, the risks and benefits associated with such bonds, and many related aspects.

What is Perpetual Bond?

A perpetual bond is a kind of debt instrument with no term of maturity. If you have invested in a perpetual bond, you can never redeem your investment. Then, why should you invest in such a bond? A perpetual bond pays you a steady interest income forever. That’s why they are known as perpetual bonds.

As you can never redeem a perpetual bond, it is similar to an equity instrument because such instruments cannot be redeemed. However, in the case of a perpetual bond, the issuer is under a legal obligation to pay you interest forever, while in the case of equity, the issuer is under no such obligation. Now that you’ve understood what perpetual bonds are, let’s delve deeper into this topic.

Features of Perpetual Bonds

  1. Infinite Coupon Payments

    Perpetual bonds provide infinite coupon payments, guaranteeing investors a consistent stream of interest indefinitely. This feature appeals to those seeking reliable income, as coupon payments resemble dividends from equity but are assured, making them attractive for income-focused investors.

  2. No Return of the Principal

    Unlike traditional bonds, perpetual bonds do not return the principal amount to investors. This means that while coupon payments continue, investors must recognize the risk of not recovering their initial investment, significantly impacting long-term financial strategies and liquidity planning.

  3. No Yield to Maturity (YTM)

    Perpetual bonds lack a Yield to Maturity (YTM) because they do not have a defined maturity date. Instead, investors assess the current yield, which is calculated based on coupon payments relative to market price, influencing decisions related to perpetual debt instruments.

  4. Embedded Call Option

    Many perpetual bonds come with an embedded call option, allowing issuers to redeem them at predetermined intervals, typically after several years. This feature enhances liquidity for issuers but introduces uncertainty for investors regarding future cash flows, as it can terminate expected interest payments.

How do Perpetual Bonds Work?

As perpetual bonds are quite different from other instruments, we should thoroughly understand how they work. The fact that perpetual bonds do not repay the principal makes them an attractive instrument for issuers. However, precisely for this reason, investors should be careful about investing in such bonds.

When an investor invests in a perpetual bond, he is supposed to receive interest income forever. Even when that investor expires, his legal heirs are supposed to receive interest income and this goes on forever.

For investors, the only benefit of investing in such bonds is that they assure an interest income for perpetuity. As these bonds are not redeemable, an investor can never get his principal back. Let’s say that an investor invests in a perpetual bond with Rs. 1,000 face value at a 7% coupon rate. In this case, he will get Rs. 70 yearly interest forever but will never get Rs. 1,000 principal back.

However, there can be exceptions to it. Often perpetual bonds are callable. This means that their issuer has the option to redeem them at any point after a specific duration. For example, an organisation can issue a perpetual bond that can be redeemed at any time after the completion of five years from the issuing date.

Even in this case, the issuer has the option (not an obligation) to pay the principal at any time convenient to him after five years. Perpetual bonds are a niche type of instrument. If you invest in such bonds, you are expected to forget about your principal amount. Hence, you should have the utmost trust in the issuer.

As these bonds are not redeemable, investors feel comfortable investing in them only if they are issued by a reputed organisation. Therefore, only the government, government entities, banks, and some corporations issue such bonds.

Additional Read: Maturity Date

Do Coupon Payments Last Indefinitely?

Coupon payments from perpetual bonds theoretically last indefinitely, making them an attractive investment choice. With no maturity date, investors can expect regular interest payments as long as the issuer remains solvent. This feature parallels dividend payments from equity shares, appealing to those seeking stable income, particularly retirees.

However, the actual continuation of these payments depends on several factors. The issuing institution must maintain its financial health to fulfill its obligations. For banks, coupon payments can depend on profitability; if they face losses, they may defer payments. Thus, while perpetual bond meaning suggests ongoing returns, evaluating the issuer's creditworthiness is crucial for managing risks.

Additionally, many perpetual bonds include embedded call options that can impact the duration of coupon payments. Issuers may redeem the bonds after specific intervals, potentially terminating payments. Investors should be mindful of this dynamic when considering what is perpetual bond, as it introduces uncertainty into expected cash flows.

While perpetual bonds offer the potential for infinite coupon payments, investors should exercise caution. Thorough research into the issuer’s financial stability and an understanding of call options are essential. This approach enables investors to navigate the landscape of perpetual bonds in India effectively, balancing risk and reward in their portfolios.

Who Issues Perpetual Bonds?

Perpetual bonds are primarily issued by large financial institutions, including banks, corporations, and governments. These entities leverage perpetual debt as a means to raise capital without the obligation to repay the principal amount. For banks, perpetual bonds play a crucial role in enhancing their capital base, classified under Tier 1 capital. This allows them to meet regulatory requirements while maintaining a stable financial footing.

Corporations also issue perpetual bonds to fund significant projects or refinance existing debt. The appeal of these bonds lies in the higher yields they offer compared to traditional bonds with fixed maturities. Investors are often attracted to the steady income from coupon payments, aligning well with their financial objectives. Understanding what is perpetual bond in this context helps investors evaluate the risks and rewards associated with these instruments.

Governments, particularly those facing fiscal challenges, may use perpetual bonds to fund infrastructure projects or address budget deficits. While this approach allows governments to raise funds without immediate repayment obligations, it raises concerns among economists regarding long-term fiscal sustainability. Investors in perpetual bonds India should carefully assess the creditworthiness of the issuing government or entity to mitigate risks.

Various institutions issue perpetual bonds to leverage their unique features for capital raising. Investors should recognize the potential benefits of steady income while also being mindful of the associated risks. A thorough understanding of perpetual debt instruments, their issuers, and the market conditions can significantly enhance investment strategies in this area.

Why Investors Find Them Attractive

Investors are increasingly drawn to perpetual bonds for various reasons, primarily their potential for generating a stable income stream without the obligation of principal repayment. This makes them particularly appealing to those seeking long-term investments with consistent returns. The fixed coupon payments resemble dividends from equity shares, providing a reliable source of cash flow. Additionally, investors appreciate the relative stability and lower market risks associated with perpetual debt compared to equities, which can be volatile. However, the allure of these bonds is not just in their income generation but also in their flexibility, as many perpetual bonds come with embedded call options that provide liquidity to the issuer and can be advantageous for investors in certain market conditions.

Key Reasons Investors Find Perpetual Bonds Attractive:

  • Steady Income: Regular coupon payments create a reliable income stream, ideal for retirees and income-focused investors.

  • No Principal Repayment: Investors are not concerned about the principal amount being returned, which can simplify long-term financial planning.

  • Higher Yields: Perpetual bonds typically offer higher yields compared to conventional bonds to compensate for the lack of maturity.

  • Flexibility: The embedded call options provide issuers with the ability to redeem bonds under favorable conditions, which can enhance liquidity for investors.

  • Diversification: They serve as an effective tool for portfolio diversification, mitigating risks associated with market fluctuations.

This combination of attributes makes perpetual bonds an appealing choice for various investor profiles, particularly in the context of perpetual bonds India, where they can be an essential part of a diversified investment strategy.

How to Calculate the Price of a Perpetual Bond?

It’s pretty simple to calculate the price of a perpetual bond, as you need only two inputs for it. The first input is the fixed coupon interest. Let’s say that you get Rs. 1,000 per year interest from a perpetual bond. So, Rs. 1,000 is the first input.

The other input is the discount rate. In this case, the discount rate means the rate at which the time value of money gets eroded over a period of time, which is typically the rate of inflation. Assume that it is 5%. To calculate the price of a perpetual bond, you need to divide its yearly interest income from its discount rate, using this formula.

Price of perpetual bond = Annual interest / Discount rate = 1,000 / 0.05 = Rs. 20,000.

Advantages of Investing in Perpetual Bonds

Prominent advantages of investing in perpetual bonds are explained below:

  • Steady stream of income: When you invest in a perpetual bond, you get a fixed stream of income in the form of interest payments till perpetuity. If you are sure of the creditworthiness of the bond issuer, you can invest in such bonds and relax for the rest of your life because you will be getting fixed interest.

  • Get higher interest than other bonds: Typically, a perpetual bond offers higher interest than other bonds. If not for this feature, people wouldn’t invest in a perpetual bond.

Risks and Drawbacks of Perpetual Bonds

The risks associated with investing in perpetual bonds are described below:

  • Credit risk of the issuer: If the issuer of a perpetual bond goes insolvent, you won’t get interest income from such bonds. Hence, investors in such bonds are exposed to credit risk. You face a higher degree of this risk in perpetual bonds than in other bonds because your investment in such bonds is forever. Hence, you and your future generations should be concerned about the credit risk of the issuer forever.

  • Interest rate risk: These bonds offer a fixed rate of interest. Even if inflation moves up, you’ll get the same interest. If inflation for a certain period is higher than the interest you are getting on a perpetual bond, you’ll earn a negative rate of interest. Hence, you face interest rate risk while investing in perpetual bonds.

  • Call option can work as a disadvantage: Often perpetual bonds are callable, which means their issuer can redeem them after a specified period. The issuer can redeem them anytime after the said period is over, which brings in an element of uncertainty, which exposes investors to risk. For example, you may invest in a perpetual bond on a perpetual basis, but if it has a call option that’s exercisable after five years, the issuer can redeem it at any time after five years.

Perpetual Bonds vs. Other Fixed-Income Securities

The main differences between perpetual bonds and other fixed income bonds are explained below:

Criteria

Perpetual Bonds

Other Fixed-Income Securities

Term of maturity

These bonds are issued for perpetuity. Hence, they don’t have a term of maturity.

These securities are offered for a fixed term.

Principal repayment

As these bonds are perpetual, their principal is not repayable. However, if the issuer exercises a call option, he has to pay back the principal to the investors.

At the completion of their fixed term, the issuer of such securities is under a legal obligation to pay back the principal to the investors.

Issuer

Such bonds are usually issued by the government, governmental agencies, banks, and a few corporations.

Such bonds are issued by all kinds of issuers, including the government, public sector undertakings, private companies, etc.

Who Should Consider Investing in Perpetual Bonds?

The issuers of perpetual bonds don’t pay the principal back to the investors. However, they pay interest forever on such bonds. Hence, perpetual bonds are only meant for those investors who want to hold an investment for an extremely long period. Such investors should invest in perpetual bonds and mostly forget about them. After investing, the only two factors they should be concerned with are: whether they are receiving interest regularly and whether the interest income is higher than inflation.

If they are not getting interest income or if the inflation rate is considerably higher than the interest, they will have to find ways to deal with the problem. However, it may not be easy to find a solution to such a problem. Hence, investors are not advised to park a significant portion of their portfolio in perpetual bonds.

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Conclusion

While it’s not difficult to understand the meaning of perpetual bonds, it’s important to appreciate that such bonds are not everyone’s cup of tea. In other words, not all investors find them suitable for investment. This is because not everyone invests for an extremely long period.

Those who want to invest in perpetual bonds should thoroughly analyse the creditworthiness of the issuer. If they are certain that the issuer can pay interest forever, they can consider investing in such bonds, if it suits their investment objective.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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Frequently Asked Questions

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What exactly are perpetual bonds, and how do they differ from regular bonds?

Answer Field

Bonds which do not have a term of maturity, which means their issuer does not have to pay their principal back and instead has to pay interest forever are called perpetual bonds. Meanwhile, regular bonds have a date of maturity, which means their issuer has to pay the principal to their investors on that date.

How do interest payments work with perpetual bonds?

Answer Field

The interest on perpetual bonds is paid forever. Usually, it’s paid once in a year (annual basis) or twice in a year (semi-annual basis).

What are the main advantages of investing in perpetual bonds?

Answer Field

There are two main advantages of investing in such bonds. One, perpetual bonds offer a steady stream of interest income. Two, typically, they offer a higher interest rate than other bonds.

What risks are associated with perpetual bonds?

Answer Field

If the issuer of a perpetual bond goes insolvent, he will not be able to pay the interest due on them. If the inflation increases to such an extent that it's higher than the interest payable on a perpetual bond, then the investors of such bonds will earn a negative return after considering the inflation.

Who should consider investing in perpetual bonds, and why?

Answer Field

Only those investors who want to earn a steady interest income for an extremely long period of time should think of investing in perpetual bonds. This is because such bonds do not pay back the principal to investors in most cases, while they pay interest forever.

How do perpetual bond ratings affect their investment potential?

Answer Field

Perpetual bond ratings significantly influence investment potential. Higher ratings indicate lower credit risk, attracting investors seeking stable income. Conversely, lower ratings can diminish confidence and demand, affecting the bond's market value. Understanding these ratings is essential for evaluating perpetual debt investments.

Can perpetual bonds be converted into equity?

Answer Field

Typically, perpetual bonds cannot be converted into equity. They are designed as fixed-income securities that provide continuous interest payments without maturity. While some hybrid instruments may allow conversions, standard perpetual bonds focus solely on generating income rather than equity benefits.

What types of organizations commonly issue perpetual debt instruments?

Answer Field

Banks, large corporations, and governments frequently issue perpetual debt instruments. Banks utilize them to enhance Tier 1 capital, while corporations issue these bonds to fund projects or refinance debt. In India, governments may also issue perpetual bonds for infrastructure financing.

How are perpetual bonds regulated in India, and what guidelines govern them?

Answer Field

In India, perpetual bonds are regulated by the Reserve Bank of India (RBI). Guidelines ensure issuers maintain adequate capital and transparency. Specific rules govern banks' issuance of perpetual debt instruments, balancing risk and financial stability for investors in the market.

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Bajaj Financial Securities Limited is not a registered broker-dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition, Bajaj Financial Securities Limited is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by Bajaj Financial Securities Limited, including the products and services described herein are not available to or intended for U.S. persons. This email message does not constitute an offer or invitation to purchase or subscribe for any securities or solicitation of any investments or investment services and/or shall not be considered as an advertisement tool. "U.S. Persons" are generally defined as a natural person, residing in the United States or any entity organized or incorporated under the laws of the United States. US Citizens living abroad may also be deemed "US Persons" under certain rules.  

ADDITIONAL DISCLAIMER FOR CANADIAN PERSONS

Bajaj Financial Securities Limited is not a registered adviser or dealer under applicable Canadian securities laws nor has it obtained an exemption from the adviser and/or dealer registration requirements under such law. Accordingly, any brokerage and investment services provided by Bajaj Financial Securities Limited, including the products and services described herein are not available to or intended for Canadian persons.  

This mailer and its respective contents do not constitute an offer or invitation to purchase or subscribe for any securities or solicitation of any investments or investment services.  

DISCLAIMER FOR REPORT

DISCLOSURES UNDER THE PROVISIONS OF SEBI (RESEARCH ANALYSTS) REGULATIONS 2014 (REGULATIONS)

Bajaj Financial Securities Limited ("Bajaj Broking" or "Research Entity") is regulated by the Securities and Exchange Board of India ("SEBI") and is licensed to carry on the business of broking, depository services and related activities.  

This Report has been prepared by Bajaj Financial Securities Limited in the capacity of a Research Analyst having SEBI Registration No. INH000010043 and distributed as per SEBI (Research Analysts) Regulations 2014. This report does not constitute an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. The information contained herein is from publicly available data or other sources believed to be reliable. This report is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this report should make such investigation as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult his own advisors to determine the merits and risks of such investment. The investment discussed or views expressed may not be suitable for all investors.  

This information is strictly confidential and is being furnished to you solely for your information. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject Bajaj Financial Securities Limited and associates / group companies to any registration or licensing requirements within such jurisdiction. The distribution of this report in certain jurisdictions may be restricted by law, and persons in whose possession this report comes, should observe, any such restrictions. The information given in this report is as of the date of this report and there can be no assurance that future results or events will be consistent with this information. This information is subject to change without any prior notice. Bajaj Financial Securities Limited reserves the right to make modifications and alterations to this statement as may be required from time to time. Bajaj Financial Securities Limited or any of its associates / group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Bajaj Financial Securities Limited is committed to providing independent and transparent recommendation to its clients. Neither Bajaj Financial Securities Limited nor any of its associates, group companies, directors, employees, agents or representatives shall be liable for any damages whether direct, indirect, special or consequential including loss of revenue or lost profits that may arise from or in connection with the use of the information. Our proprietary trading and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein. Past performance is not necessarily a guide to future performance .The disclosures of interest statements incorporated in this report are provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. The information provided in these reports remains, unless otherwise stated, the copyright of Bajaj Financial Securities Limited. All layout, design, original artwork, concepts and other Intellectual Properties, remains the property and copyright of Bajaj Financial Securities Limited and may not be used in any form or for any purpose whatsoever by any party without the express written permission of the copyright holders.  

We offer our research services to clients as well as our prospects. Though this report is disseminated to all the customers simultaneously, not all customers may receive this report at the same time. We will not treat recipients as customers by virtue of their receiving this report.  

Bajaj Financial Securities Limited and its associates, officer, directors, and employees, research analyst (including relatives) worldwide may: (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company(ies), mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the subject company/company(ies) discussed herein or act as advisor or lender/borrower to such company(ies) or have other potential/material conflict of interest with respect to any recommendation and related information and opinions at the time of publication of research report or at the time of public appearance. Bajaj Financial Securities Limited may have proprietary long/short position in the above-mentioned scrip(s) and therefore should be considered as interested. The views provided herein are general in nature and do not consider risk appetite or investment objective of any particular investor; readers are requested to take independent professional advice before investing. This should not be construed as invitation or solicitation to do business with Bajaj Financial Securities Limited.  

Bajaj Financial Securities Limited or its associates may have received compensation from the subject company in the past 12 months. Bajaj Financial Securities Limited or its associates may have managed or co-managed public offering of securities for the subject company in the past 12 months. Bajaj Financial Securities Limited or its associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company in the past 12 months. Bajaj Financial Securities Limited or its associates may have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months. Bajaj Financial Securities Limited or its associates have not received any compensation or other benefits from the Subject Company or third party in connection with the research report. Research analyst or his/her relative or Bajaj Financial Securities Limited’s associates may have financial interest in the subject company. Bajaj Financial Securities Limited, its associates, research analyst and his/her relative may have other potential/material conflict of interest with respect to any recommendation and related information and opinions at the time of publication of research report or at the time of public appearance.  

Research analyst has served as an officer, director or employee of subject Company: No  

Bajaj Financial Securities Limited has financial interest in the subject companies: No  

Bajaj Financial Securities Limited’s Associates may have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report.  

Research analyst or his/her relative has actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report: No  

Bajaj Financial Securities Limited has actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report: No  

Subject company may have been client during twelve months preceding the date of distribution of the research report.  

There were no instances of non-compliance by Bajaj Financial Securities Limited on any matter related to the capital markets, resulting in significant and material disciplinary action during the last three years. A graph of daily closing prices of the securities is also available at https://www.nseindia.com/

ANALYST CERTIFICATION

The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report.  

RISK DISCLOSURE ON DERIVATIVES

  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to ₹ 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.

SEBI study dated January 25, 2023 on “Analysis of Profit and Loss of Individual Traders dealing in equity Futures and Options (F&O) Segment”, wherein Aggregate Level findings are based on annual Profit/Loss incurred by individual traders in equity F&O during FY 2021-22.

BROKERAGE DISCLAIMER

All leveraged intraday positions will be squared off on the same day. There is no restriction on the withdrawal of the unutilised margin amount. Brokerage will not exceed the SEBI prescribed limit. Visit : https://www.bajajbroking.in/pricing

MTF 

As subject to the provisions of SEBI Circular CIR/MRD/DP/54/2017 dated June 13, 2017, and the terms and conditions mentioned in the lights and obligations statement issued by the TM (if applicable).  

US INVESTING

International investment is not supervised by any regulatory body in India. Thus, any claim or dispute relating to such investment or enforcement of any agreement/contract /claim will not be under laws and regulations of the recognized stock exchanges and investor protection under Indian Securities Law. The account opening process will be carried out on Vested platform and Bajaj Financial Securities Limited will not have any role in it.  

MARKETSMITH / GOLDENPI / SOVEREIGN GOLD BONDS

Bajaj Financial Securities Limited is only distributor of this product. These are not exchange traded products and all disputes with respect to the distribution activity, would not have access to exchange investor redressal forum or Arbitration mechanism. Bajaj Financial Securities Limited is not a registered Investment Advisory. User discretion is required before investing. Client is requested to independently evaluate and/or consult their professional advisors before arriving at any conclusion to make any investment. The decision to invest shall be the sole responsibility of the Client and shall not hold Bajaj Financial Securities Limited, its employees and associates responsible for any losses, damages of any type whatsoever. 

IPO 

This should not be construed as soliciting investment. Investors’ discretion is required. Kindly consult your financial expert before investing. No need to issue cheques by investors while subscribing to IPO. Investments in securities markets are subject to market risks, read all the related documents carefully before investing.  

SCREENERS 

Screeners is not Exchange-approved products and any disputes related to the same will not be dealt on the Exchange platform. 

SECURITIES 

Securities quoted are exemplary and not recommendatory. 

IPV 

Account would be open after all procedure relating to IPV and client due diligence is completed. 

IMAGES 

The images used are only for representation purpose. Proper due diligence has been done for the images and the image is not of any artist. The same is captured from royalty free sites. 

DISCLOSURE TO CLIENTS REGARDING PAYOUT OF FUNDS

As per SEBI circular no. SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/84 dated June 08, 2023, Stockbrokers are required to upstream the entire client funds lying with them to the Clearing Corporation. Based on client’s request the funds’ release request must be placed with the Clearing Corporation. Based on the internal process and cut-off timelines of the Clearing Corporation the funds will be released to the Stock Broker. In view of this new process, as specified by the regulatory and the cut-off time of Clearing Corporation/Banks processing the funds, Bajaj Financial Securities Limited cannot commit the exact time for releasing funds payout to its client. Clients are requested to note that, Bajaj Financial Securities Limited will not be responsible for any inconvenience caused to clients due to delay in release of funds payout, including fines, delayed charges, defaults, etc.