Individuals investing in NCDs will get interest between 8.10 per cent and 9 per cent. Non-convertible debentures ie NCDs are financial instruments. These are issued by the company. Through these, she raises money from investors.
Recently, IIFL Home Finance Limited had announced Unsecured Subordinated Redeemable Non-Convertible Debentures (Unsecured NCDs) worth Rs 1,000 each. Now another such scheme is going to open on 12th July. This is being termed as a better option for the investors. It is being said that those who invest money in this will get double returns from FD.
up to 9% interest
The NCD of Piramal CHF, a subsidiary of Piramal Enterprises, is scheduled to open on July 12. In this NCD, you will get an interest rate ranging from 8.10% to 9%. Non-convertible debentures ie NCDs are financial instruments. These are issued by the company. Through these, she raises money from investors. For this, the company brings a public issue. Those who invest in these get interest at a fixed rate. The tenure of NCDs is fixed.
On their maturity, investors get their principal amount along with interest. These are debt instruments like bank FDs. Here debt means fixed income. Some debentures can be converted into shares after a specified period. However, this is not possible in the case of NCDs. That is why they are called non convertible debentures.
Closed on 28th July
The NCD issue offers a variety of subscription options with coupon rates ranging from 9.60 per cent to 10.00 per cent per annum. Tranche I Issue will open on 6th July, 2021 with the option of early closure or extension and will close on 28th July, 2021. Unsecured NCDs have a fixed rate of interest under three different series and are called CRISIL AA/Stable and BWR. A rating of AA+/Negative (Determined) has been awarded.
what kind of investment
There are two types of NCD investments, secured and unsecured. Secured NCDs mean such debentures in which there is no risk of default of the company. In this the security of the company is there. In other words, if the company fails to make payments, investors can sell their assets and withdraw their money. In unsecured NCDs, there is no security of the company. In this way, they have more risk than the secured ones.
How to get money
In this, you buy its debentures from the company and give it money in return. Let’s assume that the company needs money so that it can grow its business. So, that company issues its debentures in the market. These are issued for a fixed period. On their maturity, the company returns the principal amount of investment along with interest to the investors. By the way, the company can pay the interest on monthly, quarterly and yearly basis also. If you do not take interest, then on maturity you get your money with principal and interest.
How to Buy an NCD
NCDs can be bought through Demat account. You can also buy them from physical form. You can invest in NCDs as per your wish for two, three, five and ten years. There are two ways to sell them. The first way is to sell them through the stock market. At the same time, the second method is of direct transfer. To sell in the share market, first you have to convert your debentures into demat. Then you have to tell your stockbroker that you want to sell them. He looks for a buyer for you. In Direct Transfer, you have to find the buyer yourself. Then this information will have to be given to the company.
