Question: Can CCD Be Converted Into NCD?

Can CCD be redeemed?

Compulsorily convertible debenture also known as CCD is a type of debenture in which the whole value of the debenture must be converted into equity by a specified time.

No Debenture Redemption Reserve is required to be created in case of CCDs..

Are NCDs good investment?

In a rising interest rate environment, fixed income investors are spoilt for choice. Banks increase rates on fixed deposits (FDs). Companies raising money through deposits offer higher rates than FDs. … Compared to company fixed deposits, NCDs offer competitive rates and are considered more secure.

Is TDS deducted on NCD interest?

5] No TDS Applicable: Interest received from NCDs is not subject to TDS u/s 193 of the Income Tax Act.

Which is the best NCD?

ET takes a look at four NCDs that have been recommended by investment advisors.Tata Capital Housing Finance. Coupon payable every year: 8.4% … L&T Financial Services. Coupon payable every year: 8.65% … Tata Capital Financial Services. Coupon payable every year: 8.65% … Mahindra & Mahindra Financial Services.

Can CCDs be secured?

A debenture is a medium- to long-term debt security issued by a company as a means of borrowing money at a fixed interest rate. Unlike most investment-grade corporate bonds, it is not secured by collateral.

How do you convert CCD to equity?

Hold Board Meeting and pass the Board Resolution for Conversion of CCD into Equity Shares along with approving Notice of Genernal Meeting for the approval of Shareholders of the Company. 3. Hold General meeting of the Shareholders of the Company and pass the Special Resolution for Conversion of CCD into Equity Shares.

Can CCD be converted to NCD?

The amount received by the NCD owner at the time of redemption is equal to principal (the book value of NCD) plus interest. … CCDs are compulsorily Convertible debentures, i.e. they are debt instruments which will compulsorily get converted into equity at a future point of time.

What happens to NCD after maturity?

If the NCDs are sold after a year or more or before the maturity date, LTCG will be applicable at 20% with indexation. Companies are ranked by credit rating agencies such as CRISIL, CARE etc. … Higher credit rating means that the company has the ability to fulfil credit obligations.

Is CCD a debt or equity?

Although debentures are undisputedly debt instruments, CCDs are debentures that are mandatorily converted into equity according to pre-determined terms at a pre-defined time. In the pre-conversion stage, the CCD holder is considered as a debtor by the company and is required to be paid interest on its investment.

Can NBFC issue NCD?

Any corporate or NBFCs are eligible to issue NCDs if it fulfils the criteria mentioned below: The NBFCs or corporate is having a tangible net worth of not less than Rs. 4 crore according to the latest audited balance sheet.

Can a company issue unsecured debentures?

Yes, private companies can issue NCD of both types (secured and unsecured), however, they cannot issue debentures carrying voting rights. If the private company is issuing secured NCDs, it must fulfill the criteria prescribed by SEBI for issuing such an instrument.

Can I sell NCD before maturity?

NCDs get listed on stock exchanges where investors can sell it before maturity. Any gain earned through selling in secondary market is termed as capital gains. … However, if there is fall in interest rates after buying NCD then selling on stock market may prove beneficial as the NCD will demand a premium.