Invest in Non Convertible Debentures
NCD investment is fast becoming a great investment option, especially for risk averse investors looking for risk-free options of capital appreciation. This is how NCD investment in India happens. Let’s assume a company is seeking funds worth Rs.100 Cr. It will issue 10 lakh non convertible debentures of the face value of Rs.1000 each.
Thus, in this case, as an investor, you will pay Rs.1000 to the company to buy a single debenture. This is called the principal amount. Every NCD is issued for a fixed period of time, during which the company pays you a fixed interest monthly, quarterly, annually, or a cumulative payment at maturity. The company will pay back the principal to the investors at the end of the tenure along with the interest accrued