Non-convertible debentures(NCDs) | Kosamattam Finance (2024)

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Non-convertible debentures(NCDs) | Kosamattam Finance (2024)

FAQs

What is NCD non-convertible debentures? ›

Non-convertible debentures (NCDs) are financial instruments used by companies to raise long-term funds through public issues. Unlike convertible debentures, NCDs cannot be converted into shares or equities. Is NCD better than FD? NCDs and Fixed Deposits (FDs) differ in risk levels.

Is it safe to invest in non-convertible debentures? ›

Secured NCDs are considered safer of the two kinds as their issues are backed by the assets of the company. In the event of the company failing to pay on time, then the investors can recover their dues by liquidating the company's assets.

What is the difference between debentures and non-convertible debentures? ›

Based on convertibility, there are two kinds of debentures which are convertible and non-convertible debentures. Convertible debentures are debentures that can be converted into equity of the company. In case of non-convertible debentures, they cannot be converted into equity shares of the company.

What is the NCD rating of Kosamattam Finance? ›

NCD Rating

The NCDs proposed to be issued under this Issue have been rated "IND A-/Stable", by India Ratings & Research Private Limited ("IRRPL") for an amount up to ₹ 20,000 lakhs.

How do NCDs work? ›

Non-convertible debentures are fixed-income instruments for specific terms and interest rates. Big companies issue them to raise funds without giving any option of conversion to equity. The interest rates offered on NCD debentures are more or less fixed.

Is NCD a debt or equity? ›

NCDs are unsecured debt securities. Investment in them could offer good diversification to those who also invest in equities. NCDs of investment grade issuers are also a secure form of investment.

What is the disadvantage of NCD? ›

Inability to Convert to Equity Shares: Unlike convertible debentures, NCDs cannot be converted into equity shares. With this, there is a restriction for investors as they can't become shareholders of the issuing company in the future, as they miss out on the potential of better returns.

What happens to NCD after maturity? ›

when you hold NCDs till maturity, the issuer pays back the capital along with interest (in case cumulative).

Can I sell an NCD before maturity? ›

Tradeable in secondary market: NCDs are listed in secondary market, and can be sold before maturity. This provides liquidity to investors.

Why do companies issue non-convertible debentures? ›

Description: Non-convertible debentures are used as tools to raise long-term funds by companies through a public issue. To compensate for this drawback of non-convertibility, lenders are usually given a higher rate of return compared to convertible debentures.

Why do companies issue convertible debentures? ›

For the company, convertible debentures provide an opportunity to acquire funds to grow. Moreover, they can decide whether to pay you back in money or shares. When traditional debentures are due for repayment, the company must repay all lenders in cash.

Can non-convertible debentures be converted into shares? ›

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.

Which company is best for NCD? ›

Ncds Listing
Issuer NameLTP ()Action
Indian Railway Finance Corporation Ltd 7.35% CRISIL AAA/Stable1,045.50BUY SELL
Power Finance Corporation Ltd 7.36% CRISIL AAA/Stable1,090.00BUY SELL
CreditAccess Grameen Ltd 9.70% FITCH IND AA-/Stable1,010.00BUY SELL
Muthoot Finance Ltd 8.25% ICRA AA+/Stable1,008.63BUY SELL
6 more rows

What is the deadliest NCD? ›

Heart disease is the number one cause of death around the world, claiming almost eighteen million lives a year. It is often caused by other conditions such as high blood pressure, high cholesterol, diabetes, and obesity.

Who is the owner of Kosamattam Finance? ›

Mathew K Cherian

Better by listening to our customers and clients and connecting them to the financial solutions they need.

Is NCD better than FD? ›

NCD vs FD

NCDs offer a higher rate of interests compared to FDs. FD interest rates are comparatively lower than NCDs. Interest on FD is also treated as other income and taxed as per investor tax slab. Investors can trade in NCDs, provided they are listed.

Is interest on NCD taxable? ›

It was held that the premium received upon redemption of Non-Convertible Debentures (“NCDs”) is not capital gains, but interest which is taxable under the head “income from other sources”.

What are the three types of NCD? ›

The main types of NCD are cardiovascular diseases (such as heart attacks and stroke), cancers, chronic respiratory diseases (such as chronic obstructive pulmonary disease and asthma) and diabetes.

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