An NCD is simply a loan you give to a company. In return it pays you a fixed rate of interest for a few years, then hands your money back — a bit like a fixed deposit, but with a company instead of a bank, usually at a higher rate and a little more risk. Here's how they work, and who issues them, sorted from safest to highest-yielding.
More coupon, more risk
NCD coupon (typical)Bank FD ≈ 7%
Start Here
Six words that unlock every NCD
Get these and the rest is easy — every NCD offer is described with the same handful of terms.
NCD
A loan to a company
Non-Convertible Debenture — you lend a company money for fixed interest. "Non-convertible" means it never turns into shares; you get cash back, not equity.
Coupon
Your interest rate
The fixed rate the company pays you, say 9% a year. Usually higher than a bank FD — because there's more risk.
Secured vs unsecured
Is it backed?
Secured NCDs are backed by the company's assets, so you rank ahead if it defaults. Unsecured ones aren't — check before you invest.
Credit rating
How safe it is
A grade from agencies like CRISIL or ICRA — AAA is safest, D means default. The single quickest gauge of how risky an NCD is.
Tenure
How long it's locked
How long your money stays invested, usually 1 to 10 years. Longer tenures often pay a slightly higher coupon.
Payout option
When you're paid
How interest reaches you: monthly, annually, or "cumulative" — rolled up and paid together with your principal at maturity.
The Risk-Return Ladder
Who issues NCDs — safest to highest-yielding
Tap any rung to see five well-known issuers in it. As you climb for a higher coupon, the credit rating drops and the risk of not being repaid rises. Coupons are indicative and change with every new issue.
1
PSU NCDs — the safest rung
Government-owned giants. They issue both bonds and NCDs; the lowest coupons, but the closest thing to a sure thing in the NCD world.
~7–7.75% coupon
01
RECGovernment-owned lender that funds power and infrastructure projects; quasi-sovereign safety.
AAArating
02
PFCPower Finance Corporation — the main financier of India's power sector. State-owned and top-rated.
AAArating
03
NABARDNational Bank for Agriculture & Rural Development — funds rural and farm infrastructure.
AAArating
04
NHAINational Highways Authority of India — builds and maintains the national highway network.
AAArating
05
HUDCOHousing & Urban Development Corporation — finances housing and urban infrastructure for states.
AAArating
2
Top-rated NBFCs (AAA)
Blue-chip lenders carrying the highest safety grade. These are the core of the retail NCD market.
~7.5–9% coupon
01
Bajaj FinanceOne of India's largest and most profitable NBFCs, lending for consumer, SME and other loans.
L&T FinanceThe lending arm of engineering giant L&T, focused on retail and rural loans.
AAArating
04
Sundaram FinanceA conservative, decades-old Chennai NBFC best known for vehicle financing.
AAArating
05
Mahindra FinanceThe Mahindra group's NBFC, a leader in rural and semi-urban vehicle loans.
AAArating
3
Housing finance companies
Lenders that fund home loans. Mostly high safety, with a small yield pickup over the AAA NBFCs.
~8.5–10% coupon
01
Bajaj Housing FinanceThe fast-growing home-loan arm of the Bajaj group; among India's largest mortgage lenders.
AAArating
02
Can Fin HomesA Canara Bank-promoted housing-finance company focused on salaried home-loan borrowers.
AAArating
03
PNB Housing FinanceA large housing-finance company backed by Punjab National Bank.
AA+rating
04
Aadhar Housing FinanceLends small home loans to lower-income families; one of India's biggest affordable-housing financiers.
AA+rating
05
Sammaan CapitalFormerly Indiabulls Housing Finance — a large mortgage and corporate lender, recently rebranded.
AArating
4
Gold-loan NBFCs
Lenders against gold jewellery — among the most frequent retail NCD issuers, at noticeably higher coupons.
~9–10.5% coupon
01
Muthoot FinanceIndia's largest gold-loan company, lending against household gold jewellery. A very frequent NCD issuer.
AA+rating
02
Manappuram FinanceA major gold-loan NBFC that also does microfinance and home loans.
AArating
03
Muthoot FincorpA separate Muthoot-group gold-loan lender (the "Muthoot Blue" brand); a regular NCD issuer.
AA-rating
04
Kosamattam FinanceA Kerala-based gold-loan NBFC; smaller and lower-rated, so it offers higher coupons.
A+rating
05
Indel MoneyA smaller gold-loan NBFC offering some of the highest NCD coupons — and carrying more risk.
A-rating
5
Higher-yield NBFCs — top of the ladder
The biggest coupons on offer, but the lowest ratings here — read the fine print and the rating closely before chasing the rate.
~10–11% coupon
01
IIFL FinanceA large diversified NBFC (gold, home and business loans); issues NCDs often, at attractive rates.
AArating
02
Edelweiss Financial ServicesA diversified financial group; its NCDs pay high coupons but carry a lower rating.
A+rating
03
Indostar CapitalA mid-sized NBFC focused on vehicle finance and SME loans.
AA-rating
04
Navi FinservSachin Bansal's digital lender (the Navi app), offering personal and home loans.
Arating
05
Nido Home FinanceAn Edelweiss-group housing-finance company (formerly Edelweiss Housing Finance).
A+rating
Higher coupon = higher risk
An NCD paying 11% isn't simply "better" than one paying 8% — it usually means the market sees a bigger chance the company won't pay you back. The credit rating (AAA → D) is your quickest guide to that risk.
Stick to issuers you understand, check whether the NCD is secured, match the tenure to when you'll need the money — and remember NCDs are not covered by the ₹5 lakh bank-deposit insurance.
Credit ratings and coupons are indicative, change with every new issue, and can differ between rating agencies; figures reflect recent 2025–26 public NCD issues.
Disclaimer: BellsEye is an educational and financial literacy platform. We are not SEBI registered investment advisors. This page is for educational purposes only and is not investment advice or a recommendation to invest in any NCD. NCDs carry credit and default risk, are not covered by bank-deposit insurance, and their ratings can be downgraded over time. Coupons and ratings shown are indicative and change with each issue. Always read the issue prospectus and consult a certified financial advisor before investing.
