Any investor would like to invest in financial instruments which would give good returns and have absolutely low volatility. Equity Market is the preferred route for investments but given the fluctuation in recent times, Debentures have caught the attention of the investors. A Debenture is a debt paper issued by companies so as to raise money from the public. This debt paper has a specific tenure where it pays a fixed amount of interest on the investment.

Debentures are of two types, Convertible and Non Convertible. Convertible Debentures are those which can be converted into an equity share on maturity. A Non Convertible Debenture or NCD is a debenture which cannot be converted. The principal amount and the accumulated interest is paid to the holder of the investment. Non Convertible Debentures are the next big thing as more and more investors are now showing interest in NCDs. These NCDs, evidently have a higher interest as compared to other financial instruments such as Fixed Deposits.

An NCD can be either a secured NCD or an unsecured NCD. A secured NCD has the backing of the assets of the company. If the company fails to pay the obligated amount then the investor can claim the amount through the liquidation of the company’s assets. An unsecured NCD does not have any backing of assets if the company fails to pay the obligation.

Indiabulls Consumer Finance Limited, a 100% subsidiary of Indiabulls Ventures Limited has opened a public issue of Secured Non-Convertible Debentures (NCDs) who offers returns of up to 11% p.a.

Benefits of investing in Non Convertible Debentures

1. NCDs are closely regulated by RBI; hence, investing in these is a safe bet.
2. The interest gained is much higher than traditional bank investments such as fixed deposits.
3. There is no Tax Deducted at Source for listed Debentures.
4. A higher tenure range of up to 60 months gives you an ample amount of time to fulfil all your financial goals and aspirations.
5. As far as liquidity is concerned, NCDs have a limited lock-in period, unlike FDs. This makes it a lucrative option for investors.
6. The bonds can be held in the ‘Demat Form’. This makes it easier to handle and monitor your investments in NCDs.
7. If the debt papers are issued by a company which has ratings by agencies such as CARE, Brick Works, CRISIL, ICRA then it helps an investor to thoroughly assess the quality of the papers before investing.
8. If the company has ratings such as CRISIL AAA or AA-Stable then it means that the issuing company has the ability and the capacity to service the debt on time. It also shows that the company carries a lower default risk.

You can consider investing in NCDs via Indiabulls Consumer Finance Limited (IBCFL). Indiabulls Consumer Finance Limited is a 100% subsidiary of Indiabulls Ventures Limited (IBVL) and a registered NBFC with RBI. It offers financial services such as Personal Loans, Business Loans and Secured Loans. The company, with a rating of BWR AA+|CARE AA STABLE has issued a secured NCD. The allotment of the issues is on first come first serve basis. Here are some features of the NCD by IBCFL.

1. NCD issues by IBCFL has a high yield ranging from 10.75% to 11.00% p.a.
2. The tenure range is of 26 months, 38 months and 60 months
3. The minimum application amount is Rs. 10,000.
4. There are no Tax Deductions at Source on interest on the NCD.
5. A higher degree of safety regarding timely servicing of financial obligations.
6. Retail Investors, (Category IV) can make an application for a maximum amount of up to 10 Lakhs.

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