GILT-EDGED

SECURITIES

The Gilt-edged market in India is the most dominant part of

debt market
 Gilt-edged securities are high-grade investments with
very low risk.

Typically, these are issued bygovernment and blue

chipcompanies.
 Blue chip companies are the companies which are well-
established and financially stable

In case of a firm, a gilt-edged security is a stock or bond

issued by such a company that has a strong record of
consistentearnings and can be relied on to cover
dividends and interest payments.
Some leading blue chip companies
in India
Tata Consultancy Services (TCS)
Reliance Industries
Oil and Natural Gas Corporation Limited (ONGC)
Imperial Tobacco Company of India Limited (ITC)
Housing Development Finance Corporation Limited(HDFC) Bank
Coal India
Sun Pharmaceutical Industries Limited
Infosys
State Bank of India (SBI)
Industrial Credit and Investment Corporation of India Limited
(ICICI) Bank.
 Government Securities
The gilt-edged securities includes government securities
or the securities guaranteed by the government. The
former includes securities of the Government of India
and of the state governments; the latter are securities
issued by Local authorities(city corporations,
municipalities etc)
Why government securities are called gilt edged securities?

Following features of government securities earned them

the name of gilt edged securities.

They have zero income default

There is high rate of return
There is cent per cent liquidity
Features
Issued at face value.
No default risk as the securities carry sovereign guarantee.
Ample liquidity as the investor can sell the security in the
secondary market.
Interest payment on a half yearly basis on face value.
Can be held in D-mat form.
Tax exemption.
Rate of interest and tenure of the security is fixed at the time
of issuance and is not subject to change.
Redeemed at face value on maturity
Maturity ranges from 2-30 years.