Quantitative Trading Intern

AlphaGrep, an Indian high-frequency trading firm, has raised ₹2 billion through one-year bonds at 10.5% interest. The move follows stricter Reserve Bank of India regulations on bank funding for trading firms, which now require full collateral and impose tighter risk limits. The funds will support AlphaGrep's artificial intelligence and machine-learning technology development, as well as its retail operations. By issuing bonds rather than seeking bank loans, the company aims to maintain smooth operations whilst enhancing its technological capabilities. The RBI's regulatory changes are designed to increase market safety, particularly for small investors.

High-speed trader AlphaGrep raises ₹200 crore via bonds after RBI curb. The Mumbai-based firm is raising ₹200 crore ($21 million) through bonds with a maturity of about one year and a 10.5% coupon, payable quarterly. The sale, among the first by an Indian speed traders, signals a funding shift for an industry that has become a major force in the country's derivatives markets | Image: Bloomberg By Divya Patil AlphaGrep Securities Pvt., one of India's largest high-frequency trading firms, is turning to the bond market for funding after the regulator tightened banks' exposure to trading firms that use their own capital. The Mumbai-based firm is raising ₹200 crore ($21 million) through bonds with a maturity of about one year and a 10.5% coupon, payable quarterly, according to a person familiar with the matter. The proceeds will be used to place margin deposits with stock exchanges and meet working-capital needs, the person said, asking not to be identified because the details are private. The sale, among the first by an Indian speed traders, signals a funding shift for an industry that has become a major force in the country's derivatives markets. Reserve Bank of India's curbs on bank exposure are pushing proprietary traders away from loans and toward bonds and commercial paper. AlphaGrep had ₹2,890 crore of bank guarantees outstanding as of June 30, according to Crisil Ratings. Guarantees deployed in its proprietary trading business are expected to be gradually phased out as they expire over the coming year and replaced with commercial paper and non-convertible debentures, the ratings company said last month. A representative for AlphGrep didn't immediately respond to a request for comment. The funding shift comes as India's HFT firms adjusts to a tougher environment after years of rapid growth. Regulatory restrictions have weighed on derivatives volumes even as competition among firms for quantitative and artificial-intelligence talent remains intense. AlphaGrep relies on internally developed statistical models to identify trading opportunities and generate signals. Trades are executed automatically according to predetermined parameters, backed by real-time automated risk-management system, according to Crisil.