5 things to know about Non-Convertible Debentures (NCD)

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.
3.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.