What is High-Value Debt Listed Entity?

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What is  High-Value Debt Listed Entity? Blog Image

Overview:

Recently, the Securities and Exchange Board of India (Sebi) has proposed a review of corporate governance norms for a high-value debt-listed entity.

About High-Value Debt Listed Entity: 

  • An entity which has listed its non-convertible debt securities on a recognised stock exchange and has an outstanding principal value of listed non-convertible debt securities of Rs. 500 Crore and above will be categorized as a ‘High-value debt listed entity’ 

What are 'Non-Convertible Debentures (securities)? 

  • Debentures are long-term financial instruments which acknowledge a debt obligation towards the issuer. 
  • The debentures which can't be converted into shares or equities are called non-convertible debentures (or NCDs). 
  • To compensate for this drawback of non-convertibility, lenders are usually given a higher rate of return compared to convertible debentures. 
  • In India, usually, these have to be issued with a minimum maturity of 90 days.

 


 

Q1) What are shares?

Shares represent equity ownership in a corporation or financial asset, owned by investors who exchange capital in return for these units. 

Source: Sebi for review of governance norms for high-value debt-listed entity ​​​​​​​