Monday December 22 2025

News Source: Global Exchanges

Focus: Fixed Income

Type: General

Country: India

Link: https://tinyurl.com/2pmtwne7




On 18th December 2025, the Securities Exchange Board of India (SEBI) issued a circular dated July 03, 2024 has provided for reduction in denomination of debt securities and non-convertible redeemable preference shares subject to certain conditions. Accordingly, amendments were made in Chapter V (Denomination of issuance and trading of Non-Convertible Securities).

The said circular provided for reduced face value of Rs. Ten Thousand for debt security or non-convertible redeemable preference share without any structured obligation subject to certain conditions. One of such conditions is that the securities shall be interest/dividend bearing. However, this stipulation excludes those debt securities which carry zero coupon.

Market participants have expressed that zero coupon bearing debt securities are instruments that do not carry periodic interest but are generally issued at a discount and redeemed at par. Investors realize returns through the difference between the discounted issue price and the face value received at maturity. This structure effectively results in compounded returns, as the investment grows over time without interim pay-outs. Such structure makes these instruments attractive to investors looking to diversify their portfolios.

In view of the above, Clause 1.3 of Chapter V of the NCS Master circular dated October 15, 2025 shall be partially modified as under:

“1.3 The Issuer may issue debt security or non-convertible redeemable preference share on private placement basis at a face value of Rs. Ten Thousand,

(i) Subject to the following conditions:

(b) Such debt security or non-convertible redeemable preference share shall be interest/ dividend bearing security paying coupon/ dividend at regular intervals with a fixed maturity without any structured obligations; or it shall be a zero-coupon debt security with a fixed maturity, without any structured obligations”

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