Issuance of Debentures

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Hi

 

Need urgent help. Our company is proposing to issue Non convertible Debentures (NCD) of maturity period of 5 years @ 11.5% interest rate. The NCD are unsecured and will be issued on private placement basis. Is it possible to issue the same. Further do we have to follow the guidelines issued by RBI as those cover NCD issued with a maturity period upto 1 year only and in our case it is 5 years.

 

Please guide what to do

Replies (3)
Originally posted by : Khushboo Maheshwari

Hi

 

Need urgent help. Our company is proposing to issue Non convertible Debentures (NCD) of maturity period of 5 years @ 11.5% interest rate. The NCD are unsecured and will be issued on private placement basis. Is it possible to issue the same. Further do we have to follow the guidelines issued by RBI as those cover NCD issued with a maturity period upto 1 year only and in our case it is 5 years.

 

Please guide what to do

anybody to help please

Originally posted by : Khushboo Maheshwari

Hi

 

Need urgent help. Our company is proposing to issue Non convertible Debentures (NCD) of maturity period of 5 years @ 11.5% interest rate. The NCD are unsecured and will be issued on private placement basis. Is it possible to issue the same. Further do we have to follow the guidelines issued by RBI as those cover NCD issued with a maturity period upto 1 year only and in our case it is 5 years.

 

Please guide what to do

 Hi Khushboo

In my opinion, you can issue NCD's through private placement.

I guess RBI is looking into NCD's issued for less than a year for NBFC's.

For more than one year maturity, kindly check sebi guidelines.

One of the company 'Share microfin ltd' had recently raised amount through issue of ncd on private placement for 2yrs. Please check the link for reference.

https://www.sharemicrofin.com/resouces.html

 

Experts your views appreciated.

regards

Santosh Shah

Dear Khushboo,

Unsecured NCD is covered under the definition of Public Deposits. So Companies (Acceptance of Deposit Rules), Sec 58A, 58AA must be complied with. also Necessary e forms shold be filed with ROC (Form 62 or 65 just check it from mca) along with a copy of statement in lieu of prospectus ( as the proposed issue is through private placement basis). No compliance under SEBI is requireded before issuing the NCD. 

 

Ayan Sengupta

Company Secretary

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