Guide book

The complete NCD guide

Fixed income from the primary market. What a debenture actually is, how a public issue is structured into series, how to compare coupons honestly, and what the credit rating is really telling you.

8 guides4 topics31 min end to end

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Contents

NCD Basics

What a debenture is, and how a public issue reaches retail investors.

3 guides

01What Is an NCD? Lending to a Company, ExplainedA non-convertible debenture is a loan you make to a company in exchange for a fixed coupon and your principal back at maturity. Here is what you actually own, and what stands behind it.4 min read 02Secured vs Unsecured NCDs — What the Charge Actually Gives YouA secured debenture has a charge on the issuer's assets held by a trustee for all holders. Here is what that protection is worth in practice, and why unsecured series pay more.4 min read 03NCD vs Fixed Deposit — An Honest ComparisonNCDs usually pay more than bank deposits. The extra is compensation for credit risk, illiquidity and the absence of deposit insurance — here is how the two actually compare.3 min read

Structure & Yield

Series, tenor, coupon frequency — and why effective yield is the number to use.

2 guides

04Reading an NCD Issue — Series, Tenor and Coupon FrequencyOne NCD issue is really several instruments sold side by side. Here is how to read the series table, and what tenor and payment frequency actually do to your return.4 min read 05Coupon vs Effective Yield vs YTM — Which Number to UseThe coupon is what the poster advertises. Effective yield is what you earn on a new issue. YTM is what you earn buying on the exchange. Three numbers, three different questions.4 min read

Credit Quality

Ratings, security cover, and what the extra coupon is paying you for.

1 guide

06NCD Credit Ratings — What the Extra Coupon Is Paying ForEvery step down the rating scale means a higher coupon and a materially higher chance of trouble. How to read a rating, an outlook, and the security behind a debenture.4 min read

Applying & Tax

Getting an allotment, and what you keep after tax.

2 guides

07How to Apply for an NCD Public IssueNCD allotment is first-come-first-served, not a lottery. That single difference from an IPO changes the tactics completely — here is the full application process.4 min read 08How NCDs Are Taxed in IndiaInterest is taxed at your slab rate, TDS applies to listed debentures since April 2023, and cumulative NCDs create a liability before any cash arrives. The post-tax picture, laid out.4 min read

These guides summarise the SEBI NCS Regulations and the Income-tax Act as they stood at the time of review. Tax rates, TDS thresholds and holding-period rules change with each Finance Act — confirm the current position and take professional advice on your own situation. Nothing here is investment or tax advice.

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