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What is a Non-Convertible Debenture? Features, Risks and Rewards Explained

21 May 2025 | 6 mins read

Non-Convertible Debentures (NCDs) are an attractive fixed-income instrument that allows companies to raise funds while offering investors the opportunity to earn stable and predictable returns. Unlike convertible debentures, NCDs cannot be converted into equity shares of the issuing company, which makes them a preferred choice for investors looking for secure, interest-based income rather than potential capital gains through shareholding. This article explains what a non-convertible debenture is, how it works, its benefits, risks, and important factors to consider before investing.