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Bond Support

KYC (Know-Your-Customer) Documentation For NCD

Applicants who do not have a Demat account and are applying for NCDs in the Physical Form, have to submit the following KYC documents:

Proof of Identification.

Self-attested copy of the proof of identification (for individuals). Any of the following documents shall be considered as a verifiable proof of identification:
  • Passport
  • Voter's ID
  • Driving Licence
  • Government ID Card
  • Defence ID Card
  • Photo PAN Card
  • Photo Ration Card

Proof of Recognition by Income-Tax Authority.

Self-attested copy of the PAN card.

Proof of Residence.

Self-attested copy of the proof of residence. Any of the following documents shall be considered as a verifiable proof of residence:
  • Ration card issued by the Govt. Of India (GoI)
  • Valid driving license issued by any transport authority of the GoI
  • Electricity bill (not older than three months)
  • Landline telephone bill (not older than three months)
  • Valid passport issued by the GoI
  • AADHAR Card / Letter issued by Unique Identification Authority of India ("UIDAI")
  • Voter's Identity Card issued by the GoI
  • Passbook or latest bank statement issued by a bank operating in India
  • Registered leave and license agreement or registered agreement for sale or rent agreement or flat maintenance bill
  • Self-Attested copy of Registered Office address in case of Applicants under Category I or Category II or
  • Life insurance policy

Proof of Bank Account.

Self-attested copy of a cancelled cheque of the bank account to which the amounts pertaining to payment of refunds, interest, as applicable, should be credited.

Allotment Procedure For NCD

  • Allotment in the First Instance:
    • Applicants belonging to the Institutional Portion, in the first instance, will be allocated NCDs up to 30% of Overall Issue Size on first come first serve basis which would be determined on the basis of upload of their Applications in to the Electronic Book with Stock Exchange.
    • Applicants belonging to the Non-Institutional Portion, in the first instance, will be allocated NCDs up to 30% of Overall Issue Size on first come first serve basis which would be determined on the basis of upload of their Applications in to the Electronic Book with Stock Exchange.
    • Applicants belonging to the Individual Category Portion, in the first instance, will be allocated NCDs up to 40 % of Overall Issue Size on first come first serve basis which would be determined on the basis of upload of their Applications in to the Electronic Book with Stock Exchange.
  • Allotment Under Subscription:

    Under subscription, if any, in any Portion, priority in allotments will be given in the following order:

    • Individual Category Portion
    • Non-Institutional Portion
    • Institutional Portion
  • Allotment on a First Come-First Serve basis:
    • For each Portion, all Applications uploaded in to the Electronic Book with Stock Exchange would be treated at par with each other. Allotment would be on proportionate basis, where NCDs uploaded into the Platform of the Stock Exchange on a particular date exceeds NCDs to be allotted for each Portion respectively.
    • Minimum allotments of 1 (one) NCD and in multiples of 1 (one) NCD thereafter would be made in case of each valid Application.
  • Allotment in Case of Over-Subscription:
    • First Come-First Serve basis:

      In case of an over-subscription, allotments to the maximum extent, as possible, will be made on a first-come first-serve basis. Thereafter on proportionate basis, i.e. full allotment of NCDs to the Applicants on a first come first basis, up to the date falling 1 (one) day prior to the date of over-subscription, and proportionate allotment of NCDs to the Applicants on the date of over-subscription (based on the date of upload of each Application into the Electronic Book with Stock Exchange, in each Portion).

    • Proportionate Allotments:

      For each Portion, on the date of over-subscription: Allotments to the Applicants shall be made in proportion to their respective Application size, rounded off to the nearest integer, If the process of rounding off to the nearest integer results in the actual allocation of NCDs being higher than the Issue size, not all Applicants will be allotted the number of NCDs arrived at after such rounding off. Rather, each Applicant whose allotment size, prior to rounding off, had the highest decimal point would be given preference, In the event, there are more than one Applicant whose entitlement remain equal after the manner of distribution referred to above, our Company will ensure that the basis of allotment is finalized by draw of lots in a fair and equitable manner.

Application Procedure For NCD

  • Without using ASBA (Applications Supported by Blocked Amount) Facility
    • Applications through the Members of the Syndicate/ Trading Members of the Stock Exchange through Collecting Banks without using ASBA Facility

      All Application Forms duly completed and accompanied by account payee cheques / drafts shall be submitted with the Members of the Syndicate, Trading Members of the Stock Exchange before the closure of the Issue. The Applications are to be submitted to the Members of the Syndicate and Trading Members on a timely manner so that the details can be uploaded on to the platform of the Stock Exchange during the Bidding Period. The cheque/bank draft can be drawn on any bank, including a co-operative bank, which is situated at and is member or sub-member of the Bankers clearing-house located at the place where the Application Form is submitted.

    • Applications for allotment of physical NCDs by Applicants who do not have a Demat Account

      All Applicants who intend to apply for NCDs in physical form should submit the Application Forms duly completed and accompanied by account payee cheques / drafts and the KYC documents shall be submitted with the Members of the Syndicate, Trading Members of the Stock Exchange. Cash/Stock invests/Money Orders/Postal Orders will not be accepted.

  • Using ASBA (Applications Supported by Blocked Amount) Facility and/or SCSB (Self-Certified Syndicate Bank) Facility

    ASBA Applicants applying through a member of the Syndicate should ensure that the Application Form is submitted to a member of the Syndicate only in the Specified Cities. ASBA Applicants should also ensure that Application Forms submitted to the Syndicate in the Specified Cities will not be accepted if the SCSB where the ASBA Account, as specified in the Application Form, is maintained has not named at least one branch at that location for the Syndicate to deposit the Application Form from ASBA Applicants Those Applicants who wish to apply through the ASBA process by filling in physical Application Form will have to select the ASBA mechanism in Application Form and provide necessary details. The filled in Application Form containing instructions to SCSB to block the Application Amount shall be submitted to the designated branches of the SCSBs. The ASBA Applications can also be submitted with the Member of the Syndicate at the Syndicate ASBA Centres (only in Specified Centres) or with the Trading Members of the Stock Exchange.

Application Amount Utilization For NCD

The sum received in respect of the Issue will be kept in separate bank accounts and we will have access to such funds as per applicable provisions of prevailing legislations, regulations and approvals.

Issue Proeeds Utilization For NCD

  • All monies received pursuant to the Issue of NCDs to public shall be transferred to a separate bank account other than the bank account referred to in sub-section (3) of section 73 of the Act.
  • Details of all monies utilized out of Issue referred to in sub-item (i) shall be disclosed under an appropriate separate head in our Balance Sheet indicating the purpose for which such monies had been utilised.
  • Details of all monies not utilized out of issue of NCDs, if any, referred to in sub-item (i) shall be disclosed under an appropriate separate head in our Balance Sheet indicating the form in which such unutilised monies have been invested.
  • We shall utilize the Issue proceeds only upon allotment of NCDs as stated in this Prospectus and on receipt of the minimum subscription of 75% of the Base Issue.
  • The Issue proceeds shall not be utilized towards full or part consideration for the purchase or any other acquisition, inter alia by way of a lease, of any immovable property; however the Issue Proceeds may be used for issuing Loans against securities.

Faqs (Frequently Asked Questions) For NCD

Q1. What are the different kinds of debentures?

A1. Debentures are financial instruments. They may be secured or unsecured. They may also be fully/ partly/ optionally convertible or non-convertible. The different kinds are as follows:

  • Secured Debentures: These instruments are secured by a charge on the fixed assets of the issuer company. So if the issuer fails on payment of the principal or interest amount, his assets can be sold to repay the liability to the investors.
  • Unsecured Debentures These instruments are unsecured in the sense that if the issuer defaults on payment of the interest or principal amount, the investor has to be along with other unsecured creditors of the company.
  • Fully Convertible Debentures (FCD) These are fully convertible into Equity shares at the issuer's notice. The issuer decides the ratio of conversion. Upon conversion, the investors enjoy the same status as ordinary shareholders of the company.
  • Partly Convertible Debentures (PCD): A part of these instruments are converted into Equity shares in the future at notice of the issuer. The issuer decides the ratio for conversion. This is normally decided at the time of subscription.
  • Optionally Convertible Debentures (OCD) The investor has the option to either convert these debentures into shares at price decided by the issuer/agreed upon at the time of issue.
  • Non Convertible Debentures (NCD): These instruments retain the debt character and cannot be converted into equity shares.
Q2. Why do companies issue NCD?

A2. Companies issue NCD to raise capital from public issues for a specified tenure.

Q3. Who can invest in NCDs?

A3. NCDs may be held by individuals, banking companies, Primary Dealers (PDs), other corporate bodies registered or incorporated in India and unincorporated bodies, Non-Resident Indians (NRIs) and Foreign Institutional Investors (FIIs).

Q4. Which is the best NCD option?

A4. Cumulative option seems to be the best as it offers the highest yield and allows to reinvest the interest at the same coupon rate / interest rate (i.e., there is no reinvestment risk).

Q5. Is NCD a Share or a fixed deposit?

A5. NCD is neither a share nor fixed deposit. It is similar to fixed deposit in the sense that at time of redemption, the return is fixed. 

Q6. Are NCDs taxable?

A6. Dematerialized forms of NCDs are not taxable.

Q7. Are there any special benefits for senior citizens?

A7. No, there are no special benefits for senior citizens by investing in NCD.

Q8. Are the applicants allowed to make changes?

A8. Applicants are not allowed to make changes. They can withdraw their Application at any time prior to the Issue Closing date.

Q9. What is the basis of NCD allotment?

A9. Allotment is based on “First come first serve” basis.

Q10. Where are NCDs bought from and sold to?

A10. Debentures can be bought and sold through secondary market. They are traded like shares.

Q11. Do debenture holders carry any voting rights?

A11. No. In the case of public issue of debentures, there would be a large number of debenture holders on the register of the company. As such it shall not be feasible to create charge in favour of each of the debenture holder.

Q12. Which law regulates the issue of NCD?

A12. Section 117 to Sections 123 of the Companies Act, 1956 regulates the provisions relating to debentures.

Q13. What is the minimum investment required for NCD?

A13. Amount invested by a single investor should not be less than Rs.5 lakhs.

Investment Procedure for Preference Shares

Transactions for purchase and sale can be made online or offline. In both the cases a demat account is mandatory. In both the cases, transactions have to be done via a broker registered with the concerned stock exchange.

  • Online, by giving online orders to the broker.
  • Offline, by giving offline orders to the broker.

For online trading an investor must:

  • Open a demat account with a broker or a bank.
  • Open a savings/current account with a bank with Internet banking (with transactions) facility
  • Open a Trading Account with a broker. A broker offers a trading account and arranges to link the bank accounts and demat account with the trading account. Trading may be done offline with the broker. If the broker offers an online trading platform, then it may be also done online.

Faqs (Frequently Asked Questions) for Preference Shares

Q1. What are the modes of purchasing preference share?

A1. Preference shares can be purchased in 2 ways:

  • Through Primary Market
  • Through Secondary Market
    • Online trading
    • Offline trading
Q2. What is the minimum amount of investment required?

A2. The minimum amount is as follows:

  • Rs. 10,00,000 for Private placement
  • Rs. 10 for Public Issue
Q3. How is the preference dividend paid?

A3. The amount of dividend can be paid by the issuer either, in cash or cheque, by crediting the amount to the investor’s bank account.

Q4. When can the Preference share be redeemed?

A4. Redeemable Preference Shares are redeemed on a fixed redemption date.

Q5. Why are preference shares issued by a company?

A5. A company issues preference shares in order to raise capital.

Q6. What are the types of preference shares available?

A6. The different types are as follows:

  • Cumulative preference shares

    In case the company has not been able to pay part or all of the annual dividends because of insufficient profit, the unpaid amount is carried forward to future years and made good when the company has sufficient profit to pay the dividends.

  • Non-Cumulative preference shares

    In case the company has not been able to pay part or all of the annual dividends because of insufficient profit, preference shareholders lose the unpaid amount.

  • Redeemable preference shares

    These are preference shares that the company will buy back at an agreed date in the future. They are classified as non-current liabilities in the statement of financial position of a company.

  • Irredeemable preference shares

    These are preference shares that will not be bought back by the company. Shareholders will continue to earn dividends as long as profit is earned. They are listed under heading equity in the statement of financial position of a company.

  • Participating preference shares

    In addition to a fixed rate of dividend, holders of participating preference shares are also entitled to participate in the distribution of dividends with ordinary shareholders.

Q7. Are there any risks associated with preference shares?

A7. Yes. As the income is fixed, the preference share price may fluctuate with interest rates and inflation.

Q8. Can the Preference shares be traded?

A8. The trading of a preference share is done similarly as the common stock.

Q9. Which law regulates the issuance of Preference shares?

A9. The Preference Shares (Regulation of Dividends) Act, 1960

Q10. Which is the best type of Preference share?

A10. Convertible Preference Shares are the best Preference shares to invest in. These shares are corporate fixed-income securities that the investor can choose to turn into a certain number of shares of the company's common stock after a predetermined time span or on a specific date. The fixed-income component offers a steady income stream and some protection of the investors' capital.

Q11. How can the investor track its stock’s performance?

A11. The most effective way to view the performance of the invested stock is by using a chart. You may refer to www.StockCharts.com.