Investors are always on the lookout for a good investment opportunity. There is a quench for that one investment decision which will not only offer returns but also manages liquidity & risk to a greater extent. Given the volatility which equity markets have consistently witnessed over the months, Non-Convertible Debentures (NCDs) have emerged as one-stop solution that continuously instills the investor’s faith in investments through a mix of risk-return profile & ease of liquidity.
Simply put, NCDs are fixed income debt instruments issued by a company wherein a company agrees to pay a fixed rate of interest on your investment for a specified period in order to raise money from market for business purposes. As the name suggests, these debentures cannot be converted into shares of issuing company unlike convertible debentures. Interest on NCDs is paid at different time period like quarterly, semi-annually or annually. They also have an option of cumulative interest in which case interest is cumulated & paid on maturity
An NCD can be secured or unsecured. Secured NCDs are backed by the issuer company’s assets to fulfill the debt obligation unlike unsecured NCDs. The NCD issues are rated by credit rating agencies like CRISIL, ICRA, FITCH, and CARE to ensure the company’s ability to service the debt on time & lower default risk.
|Issue Name||Rating||Coupon||Tenure||Put / call||Open||Close||Remarks|
|Shriram Transport finanace Company Ltd||AA+ Stable by CARE, CRISIL and India Ratings and Research||9.30/9.50/9.60/9.70
|NA||17 July 2019, Tuesday||18 August, 2019, Sunday||Payment Mode ASBA Only|