Non-Convertible Debenture (NCD) is a medium for companies to raise money from the market. Just like companies raise money through IPO, they bring NCD offers. But one big difference is that the money raised from NCDs is a loan. The company takes a loan according to its need and gives interest to the investors for a fixed period on this money. Rahul Jain, President & Head of Edelweiss Personal Wealth, explains that according to the size of the company, interest is available on the loan. NCD’s offer of reputed and big companies can come at low interest. Small companies get more interest on NCDs. But in the desire for more interest, you should not invest money in such a company where your money gets sunk.
Do not invest in NCDs on the basis of interest only. Rahul Jain’s advice is to look at the company’s reputation and work. There are two types of NCDs- Secured and Unsecured. Retail investors should choose Secured NCDs only because it has the security of the company. If the company is closed, the investors get the money after the process of bankruptcy and insolvency. It is important to check the credit rating of those companies whose NCDs are planning to invest.
Watch the full video to know more…
(Follow Money9 for latest Personal finance stories and Market Updates)
The economy is recovering but GDP is expected to be only slightly larger than it was in pre-pandemic 2019-20.
The NIP will help augment India’s productive capacity, contribute to our overall growth and bring down the logistics costs, improving competitiveness
Diversification is key and should be followed for stable and steady returns in the long run.
There is a need to continuously facilitate trade and industry and provide thrust to the growth promising sectors of Indian economy.