NCD & Corporate bonds related FAQs

How a person can apply in NCD Public Issue ?

An extensive list of qualified investors can invest in the NCD public offering. There are three main categories of NCD investors:

  1. Category 1 (QIB).
  2. Category 2 (NII).
  3. Category 3 (HNI).
  4. Category 4 (RII).

Like IPO's and NCD's, each investor category has a portion of the NCD that is reserved. Each NCD has a different number of NCDs that it reserves for each investor category.

Category 1 Investors (QIB).

Investors in NCD Category 1 are Qualified Institutional Investors, (QIB). Below is a detailed list of these investors:

  • Resident Financial Institutions
  • Statutory Corporations include State Industrial Development Corporations and Scheduled Commercial Banks.
  • Regional Rural Banks and Co-operative Banks
  •  Superannuation and Gratuity Funds ,Provident Funds and Pension Funds , all are  allowed to invest in the NCDs.
  • Register Venture Capital funds and/or Alternative Investment Funds with SEBI
  • Register Insurance Companies with the IRDA
  • National Investment Fund
  • Insurance funds created and managed by the Indian navy, army, or air force of India, or by the Department of Posts, India.
  • Mutual funds registered with SEBI
  • NBFCs that are systemically important

Investors in Category 2 (NII).

The NCD Category 2 Investors, Non-Institutional Investors (NII), are the NCD Category 2. Below is a list of qualified NII:

  • Societies and corporate bodies
  • Education institutions
  • Trust, including public/private charitable/religious trusts
  • Association of Persons
  • Research organizations for scientific and/or industrial purposes
  • Partner firms are named after the partners
  • Limited liability partnerships

Notice: In some NCDs, category 2 and 3 are combined to create category 2.

Category 3 Investors (HNI).

Investors in NCD Category 3 are Resident Indian Individuals (RII) or Hindu Undivided Familiess (HUF), who apply for an aggregate value exceeding Rs 5 Lakhs (or Rs 10 Lakhs in some NCDs).

Investors in Category 4 (RII/HUF).

Investors in NCD Category 4 are RII or HUF whose applications aggregate to a value not exceeding Rs 5 lakhs (or even Rs 10 lakhs in certain NCD's).

Important Note

The The definition of the category may vary from NCD to NCD in a NCD public issue . To choose the right category, please read the NCD IPO prospectus before you apply.

Differentiate between NCD and FD.

What are NCDs?

Who is eligible to issue NCD in India?

Can NCDs be issued by LLP?

Can NCDs be issued by private company?

What is the process to issue NCD in India?

How can we apply for NCD?

Why are NCDs issued by company?

if the NCD is issued at the share price of issuing company what will be the effectt?

What are the expenses indulged in issuing NCD?

What are the dissimilarities between Unsecured and Secured NCD ?

What are the steps involves in NCD allotment ?

Who will be accepted by NCDs ?

What are the types of NCDs ?

How NCDs are different from Bonds ?

What are the Bond's Pros and Cons ?

What are the secured rights of NCD holders ?

Are NRIs allowed to invest in NCDs ?

In NCD ,what are call and put options ?

What is NCD ? Is this a Fixed deposit or a Share ?