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Factors To Consider Before Investing In An NCD

A Non-Convertible debenture (NCD(https://www.edelweiss.in/primary-issues/ncd-listing/edelweiss-finance---investments-limited---jan-20-ncd-6-221-41871)) is a good investment option for those who want to strengthen their portfolio.<br>This presentation will shed some light on the pointers you need to keep in mind before investing in an NCD which will help you out in figuring out the NCD that is right for you

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Factors To Consider Before Investing In An NCD

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  1. Factors to consider before investing in an ncd

  2. What is NCD? A financial instrument that can help you manage liquidity and risks while offering significant profitsis known as a Non Convertible Debenture (NCD). The NCDs are issued by reputed companies for a specific period with a guarantee of a fixed interest to the investors.

  3. Factors to consider before investing in an NCD • Credit Rating • It is advisable to buy NCD with a good credit rating. These ratings can be AAA, AA+, AA & AA-. You will have to pay a higher interest rate for a lower credit rating. • Coupon Rate • The rate of interest offered by the issuer of NCD is called coupon. Companies carrying a higher risk give a higher interest rate. • Credibility of Issuer/Promoter • Itis always advisable to look at the company’s financial health before investing in their NCD. Analyze the reason for raising the money from the markets.

  4. conclusion • NCDs can be traded in the secondary market. But when it comes to liquidity, the debt market is not the best for individual investors. • So, NCDs should not be bought with the aim of trading on interest rate cycle. They should be bought and held on to till maturity. Get in touch with the stock broker you trust to apply for an NCD.

  5. THANK YOU

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