NCDs are issued by corporates in order to raise required capital. However, there are certain eligibility criteria or requirements for a company to issue NCD including the following:
- The company’s net worth shall not be less than Rs 4 crore in the last audited balance sheet.
- The issuer company has been sanctioned a term loan or working capital limit by a bank.
- The bank has classified the borrower’s account as a standard asset.
- Company must have a credit rating by any credit rating agency like ICRA, CRISIL, CARE Ratings, etc.
