How to apply for debenture in India

How to apply for debenture in India Corporations that issue debt (bonds and notes) that are not backed by a specific asset are known as debentures. These bonds are backed by the full faith and credit of the company.

Most bonds in India issues are debentures in India.

Non secured corporate bonds in India offer higher rates of return than secured bonds. When a bonds is secured, it is backed by collateral. That collateral could be” cash, securities, real estate or equipment.

Apply for Debenture Market in India

How to invest in Debenture in India?

How to invest in Debenture in India- If a corporation fails to make interest payments or does not return the par value principal at maturity on debentures, the company would be in default. If the company goes out of business, they still owe the

money to the investors. Market Linked Debentures are paid after other obligations and secured debt is paid. In the event of a liquidation, they are paid ahead of stockholders but not above other secured bondholders.

Debentures always have a rate above India Treasuries on the same maturity. India Government bonds are the safest bonds issues, so for corporate issues to be sold, they must offer an attractive spread over treasuries.

Investment in Debenture in India are fully taxable. Any interest earned is taxed federal, state and local. Since they are fully taxable, their coupon rates are higher.

Subordinated debentures are the same as debentures in most ways. They are backed by the full faith and credit of the company. However, subordinated debentures pay a high rate, but have a lower priority if the company goes out of business.

Subordinated issues are the last bonds to be paid. They are the last creditors, before stockholders to be paid. Not all companies offer subordinated debentures. The risk is obvious, but if the company does not liquidate, the investors will benefit because of the higher rate of return. Their rating is normally lower when compared to similar debenture issues.

Corporate bonds in India can be callable by the issuer. Call dates can be placed on the bond and this allows the company to redeem the bonds early beginning on set dates and at set redemption prices. This is normally not a good feature for

investors, because an issue is normally called when interest rates are low — lower than your coupon rate. The main reason debentures or bonds in general are called, is because the issuer wants to refinance their debt at a lower rate. When this happens, the investor is faced with having his money (par) returned early, but the higher paying bond is no more. To make matters worse, interest rates are lower in the market, so finding a suitable replacement will be difficult, if not impossible.

Callable bonds to pay a higher yield though, so for some the risk is worth it. Invest in Corporate debentures in India have a place in every bonds portfolio. You can buy Bonds in India from best bonds trading platform in India that is BondsIndia.