What are nonconvertible debentures?


Can anyone tell me what are nonconvertible debentures?


Nonconvertible debentures are unsecured bonds that cannot be converted to company equity or stock. These are basically used as a tool to raise long-term funds by companies through a public issue. Being risky in nature you can get a higher rate of return for such debentures compared to convertible debentures.


Hi Sourav,

Non-Convertible Debentures, also known as NCDs, are like bonds with a fixed tenure and interest rate. They cannot be converted into equity shares like convertible debentures. Read this blog post to know more about NCDs - https://blog.bankbazaar.com/term-of-the-week-non-convertible-debenture-aka-ncd/.

BB Expert