Public issue of PCDs or NCDs or FCDs

Question

Write down the per-requisites for a company to create the public issue of PCDs or NCDs or FCDs?

Answer 1

The pre-requisites that a company has to pursue to create the public issue of PCDs or NCDs or FCDs are illustrated below:-

i). For NCDs that is named as Nonconvertible Debentures and PCDs that is named as Partly convertible debentures the maturity period must be less than eighteen months in this period it is not compulsory to make a charge or sign up a trustee. If the charge is not created on the debentures then they are named as unsecured and will be treated as deposits. In PCDs, premium account throughout conversion has to be stated and determined in the prospectus. All things from redemption amount to the maturity period have to be defined in the prospectus.

ii). For PCDs and FCDs that has to be issued in the precedent and the conversion has to be made at a price that has to be verified by the SEBI and Controller of the capital.

iii). Equity shares of all the companies are listed that are having countrywide trading terminals for at least one year. Warrant and the security should be issued for an era of time. In case of NCDs, the holder of the equity warrant has been given an option to purchase particular number of shares from company to a determined price.

iv). In case of FCDs the interest won't be paid to the investors and entirely paid FCDs will be transformed automatically in shares.

v). Warrants should be issued as a security by the company granting the right to the holder to buy particular number of shares at particular price any time prior to the expiree date.