What are the different types of NCDs (Non-Convertible Debentures)?

1. Secured and unsecured NCDs (Non-Convertible Debentures)


  • Secured NCDs: These are backed by the company’s assets. In case of default, investors can claim the company's assets to recover their investments.
  • Unsecured NCDs: These are not backed by collateral, so they carry higher risk. To compensate, they typically offer higher interest rates.


2. Listed and unlisted NCDs (Non-Convertible Debentures)


  • Listed NCDs: These are traded on stock exchanges, offering liquidity to investors.
  • Unlisted NCDs: These are not traded on exchanges and are therefore less liquid.

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