Legal

Risk Disclosure

The Bond Project (operated by Fortyglyph Private Limited) · Version 1.0 · Last updated: 11 May 2026

This Risk Disclosure document is published by Fortyglyph Private Limited ("Company") to draw the attention of Users of the website https://thebondproject.in and associated services operated under the brand name "The Bond Project" (the "Platform") to the principal risks involved in investing in bonds, debentures, and other fixed-income instruments.

This document is general in nature, is not exhaustive, and does not constitute investment advice. It is intended to support informed decision-making and should be read in conjunction with the offer document, term sheet, rating rationale, and other disclosures of the specific instrument you are considering, and with our Terms of Use and Disclaimer.

Investing in fixed-income instruments involves risk. The risks described below may individually or collectively result in delayed payment, partial loss, or total loss of your invested principal and interest.

1. Credit risk

Credit risk is the risk that the issuer of a bond fails, in whole or in part, to make timely payment of interest or principal as scheduled.

(a) A higher credit rating generally indicates a lower assessed probability of default, but no rating is a guarantee of timely payment.

(b) Credit ratings are opinions issued by rating agencies and may be revised, withdrawn, or downgraded.

(c) Lower-rated or unrated bonds carry significantly higher credit risk and may result in loss of part or all of your investment.

(d) Issuer-level financial deterioration, sector-level distress, or macroeconomic shocks can rapidly affect credit quality.

2. Default risk

Default risk is the risk that the issuer fails to honour its contractual obligations under the bond, including non-payment of interest, non-payment of principal at maturity, or breach of covenants.

(a) In the event of default, recovery is typically subject to lengthy legal or restructuring processes, including under the Insolvency and Bankruptcy Code, 2016.

(b) Recoveries are not assured and may take place over months or years, often at a significant discount to face value.

(c) Recent history in India includes multiple instances of issuer default, restructuring, and write-down in debt instruments held by retail and institutional investors.

3. Market risk and interest-rate risk

Market risk is the risk that the secondary market price of a bond fluctuates due to changes in market conditions. Interest-rate risk is the risk that changes in prevailing interest rates affect bond prices and yields.

(a) When interest rates rise, bond prices generally fall, and vice versa. Bonds with longer remaining maturities are typically more sensitive to interest-rate changes.

(b) If you sell a bond before maturity, you may receive less than your purchase price.

(c) Mark-to-market changes in your portfolio value do not affect contractual cash flows if the issuer continues to pay, but may affect your ability to sell at a particular price.

4. Liquidity risk

Liquidity risk is the risk that you may be unable to sell a bond at a fair price, or at all, within a reasonable time.

(a) The Indian retail bond market exhibits significantly lower secondary-market liquidity than the equity market.

(b) Certain ISINs may trade infrequently or not at all on a given day; bid-ask spreads can be wide.

(c) Indicators of historical liquidity, including the Liquidity Indicator displayed on the Platform, are based on observed data and do not guarantee future liquidity.

(d) You should generally invest only if you are prepared to hold the bond to maturity.

5. Call, put, and early-redemption risk

Many bonds contain embedded call options, put options, or early-redemption features.

(a) Call option — the issuer may redeem the bond before the scheduled maturity. Issuers typically call bonds when prevailing interest rates have fallen below the bond's coupon rate, which is the time when you would least benefit from receiving the principal back.

(b) Put option — you may have the right to require the issuer to redeem the bond at specified dates. Exercising or not exercising the put can affect your effective yield.

(c) Call or put exercise can materially change the cash-flow profile, effective yield, and risk profile of the bond.

(d) Indicative yields displayed on the Platform may be computed to maturity, to call, or to put; you should understand which convention applies before transacting.

6. Reinvestment risk

Reinvestment risk is the risk that cash flows received from a bond (coupons or principal at maturity or call) cannot be reinvested at a yield comparable to the original investment.

(a) Falling interest-rate environments may reduce the yield available on alternative bonds.

(b) Holders of high-coupon bonds may face significant reinvestment risk if the bond is called and prevailing rates are lower.

7. Taxation risk

Taxation risk is the risk that changes in tax law, or specific tax treatment, affect the post-tax return on a bond.

(a) Tax treatment of interest income, capital gains, and TDS varies by instrument type, holding period, and the investor's tax status.

(b) Tax deducted at source (TDS) may apply to coupon payments and other distributions.

(c) Tax laws and rates may change, and such changes may apply retrospectively or to existing holdings.

(d) Yields displayed on the Platform are generally pre-tax. Your post-tax yield may differ materially.

(e) Consult a qualified tax adviser for advice on your individual tax position.

8. Rating-change risk

Rating-change risk is the risk that the credit rating of a bond is downgraded after you have invested in it.

(a) A downgrade may indicate a deterioration in the issuer's credit profile and may reduce the secondary-market price of the bond.

(b) Some investors and funds may be required to sell bonds that fall below a certain rating threshold, further depressing market price.

(c) Conversely, rating upgrades are also possible and may have the opposite effect.

9. Issuer-specific and sector-specific risks

(a) Risks specific to the issuer — including governance, financial health, business performance, regulatory action, litigation, and management changes — may materially affect the issuer's ability to honour its bond obligations.

(b) Risks specific to the issuer's sector — including regulatory changes, technological disruption, and macroeconomic conditions — may also affect credit quality.

(c) Concentration of your portfolio in a single issuer, group, or sector amplifies these risks.

10. Settlement risk

Settlement risk is the risk that a trade does not settle as expected, due to operational, counterparty, or systemic issues.

(a) Settlement of bonds in India typically occurs through stock exchanges, clearing corporations, depositories, or directly with the issuer, depending on the instrument and venue.

(b) The Company is not a clearing or settlement intermediary and is not involved in the settlement of any trade.

11. Operational and platform risk

(a) The Platform may experience downtime, latency, or technical errors that affect your ability to view information, place orders, or access features.

(b) Data displayed on the Platform may be delayed, indicative, or contain errors.

(c) Orders placed through the Platform are routed to your Broker for execution; Broker-side issues are outside the Company's control. Refer to the Terms of Use for the allocation of responsibility between the Company and your Broker.

12. Cyber and security risk

(a) Cyber-attacks, account compromise, phishing, and similar threats can affect your access to financial platforms generally.

(b) Use strong, unique passwords; enable two-factor authentication where available; do not share OTPs, broker passwords, or banking credentials with anyone, including any person claiming to represent the Company or any Broker.

13. Forex and inflation risk (not generally applicable to INR-denominated bonds)

For Indian-resident retail investors investing in INR-denominated bonds, foreign-exchange risk is not generally applicable. However, inflation risk — the risk that the real (inflation-adjusted) return on a bond is lower than the nominal yield — applies to all fixed-income investments.

14. Risks associated with model-driven analytics

The Platform displays proprietary indicators, scores, and analytics, including the Liquidity Indicator.

(a) These outputs are model-driven and based on historical observed data and proprietary methodologies.

(b) Models may be wrong; data inputs may be incomplete or stale; market behaviour may break from historical patterns.

(c) These outputs are analytical inputs only and are not investment advice, recommendations, or guarantees of future outcomes.

(d) Refer to the Disclaimer for further information on model-driven outputs.

15. General risk warning

Investing in corporate bonds, debentures, and other fixed-income instruments carries credit, market, interest-rate, liquidity, default, and other risks. Issuer default may result in delayed payment or loss of part or all of your principal. Coupon rates, indicative yields, and credit ratings do not constitute guaranteed or assured returns. Past performance is not indicative of future outcomes. Invest only what you can afford to lose, after reading the offer document, term sheet, and rating rationale carefully, and after consulting a SEBI-registered investment adviser.