1.NCDs are debentures that cannot be converted into equity shares.
2.These are used by companies to raise long-term funds from the market.
See Also
Non Convertible Debentures (NCD): Meaning, Taxation, Interest Rate, ExampleCompare NCD with FD, MF and other Debt instrumentsNon Convertible Debentures(NCDs) & Bonds In IndiaWhat is Non Convertible Debentures? Definition of Non Convertible Debentures, Non Convertible Debentures Meaning - The Economic Times3.NCDs are listed and traded on the stock exchange, providing liquidity to investors.
4.These are not backed by any security or collateral and, hence, the credit rating of the issuer is very important.
5.The Interest rate is fixed and is dependent on the credit rating of the issuer.
Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
