DHFL Raises 10,000cr by NCDs

IAS Prelims 2023

Dewan Housing Finance Corporation Ltd (DHFL) has raised Rs 10,000 crore by allotting NCDs to successful applicants.

The Board of company approved the allotment of 10 crore secured NCDs having face value of Rs 1,000 each aggregating up to Rs 10,000 crore to the respective successful applicants in various series, in terms of the shelf prospectus and tranche prospectus.

Debentures are of two types Convertible and Non-Convertible. The convertible debentures are the ones that can be converted into equity shares at a later time. This convertibility provides attraction to the investor but yield lower interest rates.

(NCD) Non convertible debentures does not convert into equity shares thus can yield a higher interest rate.

An NCD can be Secured or Unsecured. Secured NCDs are backed by the issuer company’s assets to fulfill the debt obligation unlike unsecured NCDs.