What are the types of NCDs and Bonds?

NCDs are financial instruments used by corporations to raise capital through public issues. In simple terms, NCDs are debt instruments with a fixed tenure.

There are two types of NCDs:

1. Secured NCD -

A secured NCD is backed by company assets. If the company fails to pay, investors can claim the payment through the liquidation of assets.

2. Unsecured NCD -

An unsecured NCD is not backed by company assets, increasing the chances of risk.