NCD Public Issues: How to Read One in 10 Minutes and Apply Online
Every few weeks an NBFC opens a public NCD issue: a retail-friendly bond offering with coupons recently running 8.4–9.5% for rated issuers, higher for riskier names, a ₹10,000 entry point and an application flow about as involved as an IPO. Issues from established names routinely oversubscribe. Applying is easy. The skill is in the ten minutes of reading beforehand.
What a public issue is, and isn’t
Most corporate bonds are privately placed with institutions and reach you second-hand through OBPP platforms with a spread built into the price. A public issue sells to you directly at face value: SEBI-reviewed prospectus, exchange listing on BSE or NSE shortly after allotment, demat credit, and no dealer markup. You pay ₹1,000 for a bond of ₹1,000 face. That’s the appeal, primary-market pricing with nobody in between.
The trade-off is that the menu consists of whoever happens to be raising money, which skews heavily toward NBFCs. That makes credit evaluation more important here, not less.
Finding open issues
The exchange websites list live public issues on their “public issues” pages, brokers show them in the IPO or bonds section, and OBPP platforms aggregate them. For each issue you’ll find the prospectus or tranche document, the ratings letter, and an issue-structure table. That table is where your ten minutes go.
Decoding the series table
Issues offer several series, each a combination of tenor, coupon frequency and payout style. Here’s a typical structure, drawn from IIFL Finance’s early-2026 ₹2,000 crore issue, which ran nine series from 24 to 60 months at 8.37–9.00%:
| Series | Tenor | Frequency | Coupon | ”Effective yield” |
|---|---|---|---|---|
| I | 24 mo | Annual | 8.37% | 8.37% |
| IV | 36 mo | Monthly | 8.60% | ~8.95% |
| VII | 60 mo | Annual | 9.00% | 9.00% |
| IX | 60 mo | Cumulative | — | 9.00% |
Choosing between them comes down to three things.
Monthly coupons compound in your hands, so a lower monthly sticker can beat a higher annual one. Check the effective yield in the YTM calculator rather than trusting the brochure’s rounding.
Cumulative series pay everything at maturity. They quote the highest yield, but they put all your credit exposure on one future date and the accumulated interest is taxed less kindly than you’d hope. Payout series return money as you go, which is worth a few basis points.
Longer tenors pay more and give the credit more time to change. A 10-year NCD from an NBFC is a long marriage, and the 24 to 36 month series exist for a reason.
The 10-minute prospectus skim
- Rating and rating rationale. Not just the letters. The agency’s one-page rationale names the weaknesses.
- Is it secured? Most retail NCD issues are secured against receivables. Confirm it, and note the security cover multiple.
- Issuer basics. What the NBFC lends against (gold, property, SME, consumer), gross NPAs, and capital adequacy. Three numbers, all in the prospectus summary.
- Use of proceeds. “Onward lending” is normal. A large share going to “repayment of existing borrowings” means you’re refinancing someone’s exit.
- The spread question. Coupon minus the same-tenor G-sec yield is your risk payment. Recently that’s been around 250–350 bps for decent-rated NBFC paper, against PSU bonds in the 7.0–7.5% zone. A coupon far above peers means the market is pricing something the marketing isn’t mentioning.
Applying, the easy part
Go to your broker’s IPO or NCD section, select the series and quantity (minimum usually ₹10,000), and apply with a UPI mandate if you’re within the UPI limit, or ASBA through net banking. Either way the money stays blocked in your account rather than debited, until allotment.
Categories matter. Retail, typically up to ₹10 lakh, has its own quota, and popular issues allot first-come-first-served within category. Apply on day one rather than the last day.
Allotment comes within days, then demat credit, then exchange listing usually inside a week. After listing the bond trades like any listed NCD, so check the price against the YTM calculator. Early listings sometimes trade below par, which is either a chance to average down or a warning, depending on why.
Worth knowing
Interest is taxed at slab, and listed status gets you 12.5% LTCG if you exit above your purchase price after 12 months. The full rules are here.
Oversubscription isn’t a quality signal. An issue closing early, as Capri Global’s April 2026 tranche did, proves demand and nothing else.
Size it per the checklist: 5% of fixed income per issuer. The corporate bond checklist applies to public issues without modification.
FAQ
Public issue, or the same issuer’s bonds on an OBPP? Compare them. The issuer’s older bonds sometimes trade at better yields on the secondary market than the new issue’s coupon, and five minutes with the calculator settles it.
Can I sell before maturity? Yes, on-exchange, with retail-grade liquidity, which means patience. Apply intending to hold.
Is first-come-first-served really how it works? For most retail categories in NCD issues, yes, unlike equity IPO lotteries. Day-one applications matter.
Educational content, not investment advice. Tax rules current for FY 2026-27 to the best of our knowledge, but verify with a professional before acting. See the full disclaimer.