Definition
NCD Public Issue
A Non-Convertible Debenture public issue is a company's offer of debt securities to the public that pay fixed interest and return principal at maturity, without converting into shares.
An NCD is a debt instrument: investors lend to the issuing company in return for fixed interest (coupon) and repayment of principal at maturity. 'Non-convertible' means it cannot be converted into equity shares. A public issue is open to retail and other investors and the NCDs are usually listed for trading.
NCDs may be secured (backed by company assets) or unsecured, with secured ones generally lower-risk. Credit ratings indicate default risk, and higher yields typically signal higher risk. Interest is taxable at your slab.
NCDs can offer attractive fixed income but carry credit and liquidity risk; investors should review the rating, security cover and issuer fundamentals in the offer document before subscribing.
Related terms
- Bond Investing PlatformsBond investing platforms are SEBI-regulated online avenues, including Online Bond Platform Providers, that let retail investors buy listed corporate and government bonds in small lots.
- RBI Retail DirectRBI Retail Direct is a scheme that lets individual investors directly open an account with the RBI to buy and hold government securities without an intermediary.
- Corporate FDA corporate fixed deposit is a deposit with a company or NBFC offering a fixed interest rate, usually higher than bank FDs, but without bank-style deposit insurance.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.