NCD Issue guidelines

The Securities & Exchange Board of India (SEBI) has mandated that NBFCs/HFCs/listed entities could raise Non-Convertible Debentures (NCDs) only if their net worth is ` 500 crore, besides a three-year track record of profitability. In addition, they are required to have a credit rating of at least ‘AA-’ (double A minus) with no default history or regulatory action pending against them. Further, SEBI has allowed companies a maximum of four NCD issuance's in a year under a shelf prospectus. Companies just have to file an information memorandum containing material updations during the life of the shelf prospectus.