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.