A Non-Convertible Debenture (NCD) is a debt instrument issued by companies to raise money from the public. When you invest in an NCD, you are lending money to the company for a fixed period. In return, the company pays you interest at a fixed rate and repays the principal at maturity.<\/p>\n\n\n\n
The term “non-convertible” means these debentures cannot be converted into equity shares of the company unlike convertible debentures, which can be converted into shares under certain conditions.<\/p>\n\n\n\n
For example, if a company issues an NCD with a face value of \u20b91,000, a coupon rate of 9%, and a 3-year tenure you receive \u20b990 per year and get \u20b91,000 back at the end of 3 years. NCDs are listed on stock exchanges, so you can sell them before maturity if needed, though the price may vary based on market conditions.<\/p>\n\n\n\n
NCDs can be secured or unsecured. Secured NCDs are backed by the company’s assets if the company defaults, those assets can be used to repay investors. Unsecured NCDs are not backed by any assets and carry higher risk, which is why they typically offer higher interest rates.<\/p>\n\n\n\n
Before investing in an NCD, always check the credit rating, the issuer’s financial track record, and the liquidity of the instrument on the exchange. NCDs typically offer higher interest rates than fixed deposits, but they come with higher risk than bank FDs.<\/p>\n","protected":false},"author":65,"comment_status":"open","ping_status":"closed","template":"","format":"standard","meta":[],"ht_kb_category":[2973],"ht_kb_tag":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb\/27697"}],"collection":[{"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb"}],"about":[{"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/types\/ht_kb"}],"author":[{"embeddable":true,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/users\/65"}],"replies":[{"embeddable":true,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/comments?post=27697"}],"version-history":[{"count":1,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb\/27697\/revisions"}],"predecessor-version":[{"id":27699,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb\/27697\/revisions\/27699"}],"wp:attachment":[{"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/media?parent=27697"}],"wp:term":[{"taxonomy":"ht_kb_category","embeddable":true,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb_category?post=27697"},{"taxonomy":"ht_kb_tag","embeddable":true,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb_tag?post=27697"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}