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Can you explain to me the different terms used in the NCD application?

An NCD application form may look overwhelming for someone new. Don’t worry, here’s your cheat sheet to all the key terms you need to know from the form:

Issuer Name: It's the name of the company that issues the NCD to the public.

Credit Ratings: Credit grades given by agencies that indicate the debt obligations of the company. Higher the ratings, the lesser the credit risk, the better the company and its NCD. 

Issue Price: It is one fixed price per NCD bond and is also known as the Face Value of the NCD. Generally, companies keep it fixed at ₹1,000.

Series: Each NCD offers a different combination of tenure and payouts, depending on which the interest rate of each series varies. You can choose the series best suited for your needs.

Security Type: The period of interest payment the company pays you for buying NCD bonds. They are of four types:

     o Monthly

     o Quarterly

     o Annual

     o Cumulative

Issue Size: It is the total funds that the company has decided to raise via public funds by issuing NCD.

Coupon: It is the interest rate that you will receive on the total invested amount periodically, on intervals of the security.

Tenure: Refers to the period after which the NCDs mature and you will receive your full principal amount you lent to the company.

Maturity Date: It is the date on which the NCDs will mature and you will receive the full amount for investing in that tenure.

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