--> Gyaata NCD

NCD

Non convertible debentures

Non convertible debentures


What are Non-convertible debentures?
NCD is a form of fixed deposit bearing fixed coupon rate & maturity time. NCDs could be listed & un-listed.

(Generally we avoid recommending un-listed debentures since those are not rated. Without rating it would be difficult to understand the financial health of the companies & its repayment capacity)
Why listed NCDS?
Listed NCD are required to be rated by at least two rating agencies and are reviewed periodically even post its issuance till the time of its maturity. Downward change in rating cautions the investor about the safety of the investment so that he could take corrective measures well in advance.

  • Listed NCDS are traded on exchanges (BSE and NSE) like shares and hence provide liquidity, could be sold without any hassles in case of emergency.
  • Listed NCD also provide higher yield in case of downward interest rate cycle.
  • Interest earned on NCDs is not liable for TDS as in the case of fixed deposits /unlisted NCD.
  • Further if anyone has view on interest rate cycle, he could buy such securities from the market & sell at premium in case the market moves to his expectation. Even if the market doesn’t moves as per his expectation then also he is safe with his principal & earn yield, keeping the same till maturity

Untitled Document

Useful Links

Stay Wealthy
Stay Protected
Solutions
Resources
Untitled Document