Compliance and SEBI explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Non-Convertible Debentures (NCDs) are debt instruments that cannot be converted into equity shares. They are issued by companies to raise medium-to-long-term debt capital from investors. Listed NCDs are governed by SEBI (Non-Convertible Securities) Regulations 2021 (SEBI NCS Regulations) which replaced the SEBI (Issue and Listing of Debt Securities) Regulations 2008.
Types of NCDs
- Secured NCDs: Backed by specific assets of the issuer; preferential claim in case of default
- Unsecured NCDs: No specific security; subordinated to secured debt; higher coupon rate
- Tax-Free Bonds: Issued by government entities; interest exempt from income tax
- Market-Linked NCDs: Returns linked to market indices
Eligibility for Listed NCD Issuance
- Net worth > Rs. 100 crore (for public issue) or Rs. 4 crore (for private placement listing)
- No default on payments of interest/principal in past 3 years
- Credit rating: Minimum "investment grade" rating from SEBI-registered CRA
- SEBI ICDR registration for public issues
Debenture Trustee
All listed NCD issuances (public or private placement listing) require a SEBI-registered Debenture Trustee (DT). DT role:
- Execute trust deed with the issuer
- Monitor compliance with covenants
- Protect interests of NCD holders
- Enforce security in case of default
- Hold asset charge on behalf of investors
NCD Issue Process (Public Issue)
- Board and shareholder approval (special resolution for public issue)
- Credit rating from SEBI-registered CRA
- Appointment of DT and execution of trust deed
- SEBI filing and approval
- Exchange listing application
- Issue open for subscription (3-10 days)
- Allotment and listing within prescribed timelines
Post-Listing Compliance
- Half-yearly payment of interest/principal as per schedule
- File audited financials within 60 days of year end with exchange
- Quarterly compliance report
- SEBI NCS Regulation 57: continuous disclosure obligations
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Key Facts About Compliance and SEBI
- Applies in: All states across India, under the relevant central law.
- Mode: Mostly online via the official government portal.
- Typical timeline: Ranges from a few days to a few weeks depending on the case.
- Non-compliance: May attract penalties, interest or late fees.
- Expert help: TaxClue completes the entire process end to end for you.
What is a Non-Convertible Debenture?
A fixed-income debt instrument issued by companies that cannot be converted into equity shares. Can be secured or unsecured.
Is a debenture trustee mandatory for NCDs?
Yes. All listed NCDs (public issue or private placement listing) require a SEBI-registered Debenture Trustee to protect NCD holders' interests.
Over 90% of compliance penalties in India arise from missed due dates — timely handling can save businesses thousands of rupees each year.
Compliance and SEBI: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.
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Why This Matters
Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly. Rules and thresholds in corporate laws are revised periodically, so it helps to review your obligations at the start of each financial year. Professional guidance from a qualified CA, CS or advocate ensures that filings are accurate and submitted well before the due date.
Small businesses and startups especially benefit from setting up a simple compliance calendar to track recurring deadlines. Government portals now allow most applications and filings to be completed online, reducing paperwork and turnaround time. Keeping your PAN, registration certificates and board resolutions organised makes every subsequent filing faster. When in doubt, it is better to seek clarification early rather than risk a notice or a late-filing penalty later.
A clear understanding of the applicable law helps you make confident, well-informed business decisions. TaxClue's experts regularly assist businesses across India with end-to-end corporate laws support at transparent, affordable pricing. Timely compliance also improves your credibility with banks, investors and government authorities. Reviewing your obligations with a professional at least once a year keeps your business audit-ready and stress-free.
Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly.
Getting Compliance and SEBI right the first time saves both time and money. Many businesses seek expert help for Compliance and SEBI to stay fully compliant.