Secured Investing
Invest in NCDs through a highly secure online platform that not only makes your investment safe but also trouble-free and free from various types of investing risks.
Non-Convertible Debentures (NCDs) are a kind of fixed-income financial instrument that are issued by corporations to raise funds for their long-term investment or capital. A fixed rate of interest is paid to investors, and principal is paid on the date of maturity. As the name suggests, it is a debenture that cannot be converted into equity or stocks of the company and is redeemable at the time of maturity.
Fixed Returns: NCDs offer a guaranteed fixed return with periodic payout to ensure a steady income. Non-Convertible: NCDs cannot be converted into equity shares or stock of the company till maturity. Higher Yields: Compared to convertible debentures, NCDs offer higher interest rates to the investors. Highly Rated: NCDs are rated by the top credit agencies, as per the creditworthiness of the issuer.
Fixed Income: The interest is paid at the predefined intervals to ensure investors get a fixed rate of returns. Flexible Pay-outs: The interest is paid with various payout options monthly, quarterly, yearly, or cumulative. Flexible Tenure: NCDs are issued with different maturity periods of 1 to 20 years, as per the issuer's needs. High Liquidity: Various NCDs that are listed and traded on the stock exchange offer high liquidity for investing.
To invest in non-convertible debentures, you have various options, either you can apply in the upcoming NCD IPO from the primary market or can buy from the secondary market. In both situations, you must have a demat account to hold your NCD in digital form. And for that, you need to find the right broker providing demat and trading account services to buy or sell such securities online through various platforms.
When investing in such sophisticated financial instruments, you need the right platform from where you can invest in the NCDs offered by the various entities. Apart from getting instant updates for new NCD issues, the online platform needs to be secure and hassle-free to make the investing experience seamless. Globe Capital offers one of the most dynamic online platforms to invest in NCDs with the following features.
Explore NCDs
Invest in NCDs through a highly secure online platform that not only makes your investment safe but also trouble-free and free from various types of investing risks.
As soon as new NCDs are issued in the market, our clients get instant updates on their mail or through their trading account app to not miss a single NCD for investing.
The most user-friendly interface to make the buying and selling of such fixed-income securities hassle-free with one-click online investing facility through cross-platforms.
Enjoy the advantages of investing in NCD through an industry-enriched, experienced investment partner to get the best deals at low cost and diversify your investment portfolio.
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Non-convertible Debentures (NCDs) in India are fixed-income financial instruments issued by companies to raise funds for long-term capital. NCDs cannot be converted into company equity or shares.
NCDs are mainly two types - secured NCDs and unsecured NCDs, classified as per their collateral security feature and interest payout structure.
A secured NCD is backed with collateral security by the issuer to ensure assured payments to investors in case the company defaults, making it a secured fixed-income security.
An unsecured NCD is not backed or supported by any collateral security or by any physical assets of the issuer. It is also not convertible into equity or stocks but offers a higher rate of interest to investors.
Investing in NCDs allows investors to get steady income through highly rated fixed-income securities that also offer high liquidity for trading or investing with assured returns.
Public companies, corporate bodies, and non-banking financial companies (NBFCs) with high creditworthiness and net worth can only issue NCDs to raise funds for long-term capital.
The minimum amount required to invest in NCDs starts with Rs 10,000 through a public issue consisting of 10 bonds with a face value of Rs 1,000 each. However, the exact amount depends on the issuing company's offer document, but you can buy a single NCD from the secondary market as low as Rs 1,000.
For investing in a publicly listed NCD, there is no mandatory lock-in period, but before maturity, you cannot redeem or return it to the issuer; instead, you can sell it into the secondary market. Unlisted NCDs issued through private placement may typically have a lock-in period from 1 year to 3 years.
NCD cannot be converted into equity shares or stock of the issuing company, while convertible debentures can be converted into the stock or equity shares of the company. NCDs offer higher interest rates compared to convertible debentures with dual status as a creditor and owner.
NCDs are a type of corporate debt instrument, while bonds are a broader category of debt instruments. Bonds are usually issued by government-backed entities, while NCDs are mostly issued by private companies and corporations. NCDs offer higher interest rates due to higher risk compared to bonds, which have low risk.
NCD is issued to raise funds for long-term capital without diluting the ownership in the company. This is an alternative borrowing option for a company without equity dilution, issued at predictable cost.
Depending on the credit rating, tenure and types (secured or unsecured) of NCD, the interest rates are in the range of 7.0% to 11.5% per annum with monthly, quarterly, half-yearly, or annually pay-out options.
It is a fixed-income financial instrument, and its risk level depends on the type of NCD and the credit rating of the issuer, making this a low-risk investable instrument in the financial market.
The primary risk factors of NCDs are credit default risk, liquidity risk, and interest rate risk. Apart from that, investing in this fixed-income security also carries inflation risk.
Yes, tax deducted at source (TDS) is applicable on interest paid on listed and unlisted NCDs for resident individuals at 10% if the investor provides PAN details and 20% without PAN details.
For listed NCDs, short-term capital gains (STCG) are applicable if sold within 12 months, and considered as long-term capital gains (LTCG) if sold after 12 months. While for non-listed NCDs, STCG is applicable if sold within 36 months and LTCG applied if sold after 36 months, as the latest applicable slab rates.
Yes, Non-Resident Indians (NRIs) can invest in NCDs in India through an NRE or NRO account. NRIs are allowed to invest in NCDs only when the issuing company permits NRI participation in its offer documents.
If you hold the NCDs in the demat account, you can use them as collateral security to borrow a loan, or they can be pledged to generate trading margin or borrow a secured loan.
You cannot transfer the ownership of NCDs without selling them. You can sell them in the secondary market to transfer the ownership of the NCD.
You can buy NCDs from the primary market when a new NCD is issued. And you can buy or sell NCDs from the secondary market, which are already listed on the stock exchanges. To buy and sell NCDs, you need to open a demat account with a SEBI-registered broker providing an online platform to invest in such securities.
You can redeem NCD when the maturity date of the instrument arrives. However, if your NCD agreement includes a put option, you can request the issuing company for early buyback on a pre-specified date, and if the company agrees to exercise a call option, they redeem the NCD from you before the maturity.
To find the latest or upcoming NCDs in the market, you have to check the primary public issuances on stock exchange announcements, or you can search the debt segment on NSE and BSE. Apart from that, you can also find the NCDs listed in the market through online trading platforms offered by your broker.
The best non-convertible debentures in India depend on the risk tolerance of the investor, interest returns and creditworthiness of the issuer. The NCDs rated with AAA or higher ratings issued by the PSUs and leading corporates in India are considered the best NCD offering assured returns with the highest security.
All types of investors, including Resident Indian individuals, Hindu Undivided Families (HUFs), retail investors, High Net-Worth Individuals (HNIs), and institutional investors can invest in NCDs.
To apply for NCD through Globe Capital, you have to open demat and trading account with your valid KYC documents. Once you have access to your trading account, you can go into the fixed income securities section and apply for or buy the NCD or any other such securities as per your funds availability.