Who Can Invest in NCDs?

Retail investors, Institutional investors, Non-institutional investors and High Net worth individuals can invest in an NCD.

Depending on who applies for the NCD, the applicants are grouped in different NCD investor categories as I, II, III or IV as stated below.

Category I - Institutional Category

• Public Financial Institutions, Statutory Corporations, Commercial Banks, cooperative banks and Regional Rural Banks are authorized to invest in NCDs.
• Provident Funds, Pension Funds, Superannuation Funds and Gratuity Funds, which are authorized to invest in NCDs.
• Venture Capital Funds and/or Alternative Investment Funds registered with SEBI.
• Insurance Companies registered with IRDA.
• National Investment Funds.
• Mutual Funds.

Category II - (Non-Institutional Category)

• Companies; bodies corporate and societies registered under applicable laws in India and authorized to invest in the NCDs.
• Public/Private Charitable/Religious trusts authorized to invest in NCDs.
• Scientific and /or industrial research organizations; which are authorized to invest in the NCDs.
• Partnership firms in the name of partners; and
• Limited Liability Partnership formed and registered under the provisions of the LLP Act, 2008 (No.6 of 2009).

Category III - (High Networth Individual Investors)

• Resident Indian Individuals.
• Hindu Undivided Families.

with investments of more than Rs 10 lakhs.

Category IV - Resident Individual Investors

• Resident Indian Individuals.
• Hindu Undivided Families.

with investments up to Rs 10 lakhs.

Some NCD issues can have only 3 categories as in certain cases the HNI and NII categories can be clubbed together.