Non Convertible Debentures

Non-Convertible Debentures (NCDs)

In the world of finance and investments, there are various options available for investors to choose from. One such investment option is non-convertible debentures.

Non-Convertible Debentures (NCDs) are debt instruments issued by companies to raise capital. Just like convertible debentures, NCDs are also fixed-income instruments, but with a key distinction - they cannot be converted into equity shares of the issuing company.

Key Features

Fixed Interest Rate: NCDs offer a fixed interest rate, providing investors with a predetermined rate of return over the investment tenure. This makes NCDs a popular choice for conservative investors seeking a stable income stream.

Tenure Options: NCDs come with various tenure options, allowing investors to choose the duration that aligns with their investment goals and risk appetite. Tenure options typically range from a few months to several years.

Higher Yields: Compared to traditional fixed deposit schemes, non-convertible debentures generally offer higher interest rates, making them an attractive investment avenue for those looking to earn higher returns.

Credit Rating: NCDs come with a credit rating that reflects the issuer's ability to repay the debt. Higher-rated NCDs offer lower risk, but they may also have lower interest rates. As an investor, you can assess the credit rating before making an investment decision to mitigate risk.

Liquidity: While non-convertible debentures are not as liquid as other investment options like stocks, they can still be sold or traded on the secondary market. However, it is essential to be aware that the liquidity may vary depending on the demand and supply dynamics of the specific NCD.

Tax Implications: The interest earned on NCDs is taxable as per the investor's tax slab. Prior to investing, it is crucial to understand the tax implications and consider the impact it may have on your overall returns.

To know more on our NCDs contact your nearest branch in your region.