Ongoing NCD IPOs

When a company needs money, it can issue NCDs to the public. SEBI sets the rules for this process. The issuer files a prospectus and gets a credit rating. Then the subscription window opens. It usually stays open for 5 to 15 working days. The window can close earlier if the issue gets fully booked. This includes the extra portion the issuer keeps in case demand is high, called the green shoe option.

What are ongoing NCD IPOs?
Ongoing NCD IPOs are NCD public issues open for subscription right now. They are also called a current bond IPO when they are live on the market. The issuer can be an NBFC (a finance company that lends money but is not a bank), a corporate firm, or a municipal body. It depends on who is raising money at the time.

When you subscribe, you are lending money to the issuer. The issuer pays you a fixed interest rate over the bond's tenure. At maturity, your principal is returned to you. The NCDs list on NSE and BSE within six working days of the issue closing. So you can sell them on the exchange if needed.

How NCD IPOs Work
The process is similar to an equity IPO:

1. The issuer files a draft prospectus with SEBI and gets credit ratings.
2. The issue opens for subscription on a published date.
3. The window runs for 5 to 15 working days. It can close earlier if the full issue gets booked, including the green shoe option
4. Investors apply through ASBA or UPI, the same method as equity IPOs.
5. NCDs are credited to your demat after allotment. Listing happens within 6 working days of closure.
   
   

Common Features
Most ongoing NCD IPOs share a similar structure:

A simple example: Suppose you subscribe to an NCD IPO for Rs. 50,000. The series you pick pays 10% a year, with monthly payouts, over 36 months. You receive about Rs. 416 every month as interest. Over 36 months, you earn around Rs. 15,000 in total interest. At maturity, your Rs. 50,000 principal is returned.

Series Structure
Most NCD IPOs offer multiple series under one issue. You can pick the tenure and payout frequency that suits you. A typical structure might include:

• Series I: 24 months, monthly interest
• Series II: 36 months, annual interest
• Series III: 60 months, cumulative (interest paid at maturity)
• Series IV: 60 months, monthly interest

Yields can vary by 50 to 150 basis points across series for the same issuer.

Risks to Understand
NCDs are debt securities. They carry real risks. Three things matter:

1. Credit risk: The issuer might fail to pay you back. This depends on the company's financial health. Even highly rated NBFCs have defaulted in the past when their sector turned or their loan book weakened.
2. Liquidity risk: Listed does not always mean actively traded. Some NCDs see thin volume on the exchange. So an early exit may not happen at the price you expect.
3. Interest rate risk: If market interest rates rise after you subscribe, the resale value of your NCD can drop. This matters only if you sell before maturity.

The credit rating, the offer document, and the issuer's financials are the right starting points for your decision.

How to Invest in NCD

Primary market on GoldenPi:GoldenPi is a SEBI-registered online bond platform provider. To invest in NCD primary market issues:

1. Log in to your KYC-verified account.
2. Browse the Bond IPO section or the corporate NCD IPO list for open issues.
3. Each listing shows the issuer, rating, tenure options, coupon, payout frequency, and dates.
4. Read the prospectus and the key information document before applying.
5. Apply via UPI or ASBA, the same method used for equity IPOs.
6. NCDs land in your demat after allotment. Listing follows within 6 working days.

Taxation 

Interest on NCDs is taxed as income from other sources at your slab rate. Under Section 193 of the Income Tax Act (effective 1 April 2023), TDS at 10% applies on listed corporate NCDs when annual interest from one issuer crosses Rs. 10,000 (post-Budget 2025).

Capital gains on listed NCDs sold within 12 months are taxed at a slab. Beyond 12 months, the gain is long-term. It is taxed at 12.5% without indexation under the Finance (No. 2) Act, 2024.

Top 5 Ongoing NCD IPOs