Non-Convertible Debentures (NCDs)

Non-Convertible Debentures (NCDs) are corporate debt instruments that cannot be converted into equity. They offer higher yields than fixed deposits.

The difference between NCDs and Bonds is that NCDs are typically issued by corporates, while bonds are often issued by governments or municipal houses with sovereign guarantees. The key difference lies in issuer profile, risk, convertibility, and security.

Issuers & Yields

Issuers of NCDs are normally Corporates, NBFCs, housing finance companies, and infrastructure firms. NCDs have credit ratings and yields typically range between 9% and 12%.

• Can be secured or unsecured.
• Fixed maturity period with chosen frequency of interest payouts.
• Carries a certain amount of risk depending on the issuer's credit rating, unlike government bonds which have sovereign guarantee.