NON-CONVERTIBLE DEBENTURES (NCD’S)

NCDs are like lending money to a company with the promise of getting it back with interest, but you don't get a share of the company's ownership.

Here's how it works:

Loan Agreement

When you buy NCDs, you're essentially lending money to a company. In return, the company promises to pay you back the amount you've lent, along with interest, over a fixed period.

Non-Convertible

Unlike convertible debentures, which can be converted into company shares after a certain period, non-convertible debentures cannot be converted into shares. So, you'll only get your money back with interest, not company ownership.

Interest Payment

The company pays you interest at regular intervals, usually quarterly or annually, depending on the terms of the NCD. This interest is your reward for lending money to the company.

Fixed Tenure

NCDs have a fixed maturity period, meaning you'll get your principal amount back at the end of this period. It could range from a few months to several years.

Risk and Return

NCDs typically offer a fixed rate of interest, so the return is predictable. However, like any investment, there's a risk involved.