{"id":18050,"date":"2023-12-12T07:59:35","date_gmt":"2023-12-12T02:29:35","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=18050"},"modified":"2025-04-05T08:21:01","modified_gmt":"2025-04-05T02:51:01","slug":"ncrps","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/ncrps\/","title":{"rendered":"Non-Convertible Redeemable Preference Shares (NCRPS)"},"content":{"rendered":"<h2>What are Preference Shares?<\/h2>\n<ul>\n<li>Preference shares, more commonly referred to as preferred stock, are\u00a0shares of a company\u2019s stock with dividends\u00a0that are paid\u00a0out to shareholders before common stock dividends are issued.<\/li>\n<li>If the company enters bankruptcy,\u00a0preferred stockholders are\u00a0entitled to be paid\u00a0from company assets\u00a0before common stockholders.<\/li>\n<li>Non-Convertible v\/s Convertible Preference Shares:\n<ul>\n<li>Preference shares that can be\u00a0easily converted into equity shares are\u00a0known as convertible preference shares.<\/li>\n<li>Non-Convertible preference shares are those shares that cannot be converted into equity shares.<\/li>\n<\/ul>\n<\/li>\n<li>Redeemable v\/s Non-Redeemable Preference Shares:\n<ul>\n<li>Redeemable\u00a0preference shares are those shares that can be repurchased or redeemed by the issuing company\u00a0at a fixed rate and date. These types of shares help the company by providing a cushion during times of inflation.<\/li>\n<li>Non-redeemable preference shares are those shares that cannot be redeemed or repurchased by the issuing company\u00a0at a fixed date. Non-redeemable preference shares help companies by acting as a lifesaver during times of inflation.<\/li>\n<\/ul>\n<\/li>\n<li>Other Types:\n<ul>\n<li>Cumulative preference shares: Some preference shares also\u00a0receive arrears of dividends, which are called cumulative preference shares.<\/li>\n<li>Participating preference shares: These\u00a0help shareholders demand a part in the company\u2019s surplus profit\u00a0at the time\u00a0of the\u00a0company\u2019s liquidation after the dividends have been paid to other shareholders. However, these shareholders receive fixed dividends and get part of the surplus profit of the company along with equity shareholders.<\/li>\n<li>Non-Participating preference shares: These do not benefit the shareholders the additional option of earning dividends from the surplus profits earned by the company,\u00a0but they receive fixed dividends offered by the company.<\/li>\n<li>Adjustable Preference Shares: In the case of adjustable preference shares, the\u00a0dividend rate is not fixed\u00a0and\u00a0is influenced by current market rates.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Key Facts about Debentures<\/h2>\n<ul>\n<li>A debenture is a type of bond or other\u00a0debt instrument that is unsecured by collateral.<\/li>\n<li>Since debentures have no collateral backing, they must\u00a0rely on the creditworthiness and reputation of the issuer for support.<\/li>\n<li>Both corporations and governments frequently\u00a0issue debentures to raise capital or funds.<\/li>\n<li>Similar to most bonds, debentures may\u00a0pay periodic interest payments called\u00a0coupon payments.<\/li>\n<li>Convertible vs. Nonconvertible:\n<ul>\n<li>Convertible debentures are bonds that\u00a0can convert into equity shares of the issuing corporation\u00a0after a specific period.<\/li>\n<li>They are attractive to investors that want to convert to equity if they believe the company&#8217;s stock will rise in the long term.\u00a0<\/li>\n<li>However, the ability to convert to equity comes at a price since\u00a0convertible debentures pay a lower interest rate compared to other fixed-rate investments.<\/li>\n<li>Nonconvertible debentures are traditional debentures that cannot be converted into equity of the issuing corporation. To compensate for the lack of convertibility investors are\u00a0rewarded with a higher interest rate\u00a0when compared to convertible debentures.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<hr \/>\n<h3>Q1) What are equity shares?<\/h3>\n<p>Equity shares are defined as long-term financing options for firms looking to raise capital. Each equity share represents a unit of part ownership in the company. Equity shares are also referred to as common stock, or common shares, and are offered as an investment opportunity to the public. Investors in such shares hold the right to vote, share profits and claim assets of a company.\u00a0<\/p>\n<p><strong>Source:<\/strong> <a href=\"https:\/\/indianexpress.com\/article\/business\/market\/sebi-proposes-slashing-ncd-face-value-from-rs-one-lakh-to-rs-10000-9064112\/\" target=\"_blank\" rel=\"nofollow noopener\"><u>SEBI proposes slashing NCD face value from Rs one lakh to Rs 10,000<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Preference shares are shares of a company\u2019s stock with dividends that are paid out to shareholders before common stock dividends are issued. <\/p>\n","protected":false},"author":5,"featured_media":18051,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-18050","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/18050","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=18050"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/18050\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/18051"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=18050"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=18050"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=18050"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}