How to Issue NCDs in India?

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The process to issue NCDs is as follows:

  • Issuer conveys board meeting and decides NCDs issue type.
  • For issuing secured NCDs, the company must follow the Companies Rules, 2014.
  • It needs to appoint a debenture trustee with approval from SEBI.
  • In the board meeting, consent over form no. PAS-4, PAS-5, debenture trust agreement, the appointment of an expert, date of conducting shareholder meeting, borrowing powers, and debenture subscription agreement is taken.
  • The draft mentioning important detailing such as debenture trustee agreement, debenture subscription agreement, mortgage agreement and records of private placement offer is prepared.
  • Board resolution is executed to create the charge on the company's assets.
  • Board of directors are authorized to maintain a separate account for NCD issue.
  • Offer letter is dispatched to shareholders and bank account is opened.
  • File offer letter to Registrar of Companies (ROC) after making allotment of NCDs.
  • Convey a board meeting again for allotment issue, approval of the draft agreement and draft Debenture Trust Deed.
  • The certificate of debentures is issued within 6-months from the date of allocation.
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