Debt Capital Markets interview preparation

Questions

100

Traced to a firm

45

Firms

26

Updated

September 2026

Asked at

All firmsTSTruist Securities5PIMCO4TD Securities4Apollo Global Management3Nomura3Scotiabank3Bain Capital2Houlihan Lokey2Mizuho2Neuberger Berman2Oaktree Capital Management2RCRBC Capital Markets2Carlyle Group1Deutsche Bank1Golub Capital1HPS Investment Partners1Invesco1KKR1Lazard1Moelis & Company1Moody's1Northern Trust1NUNuveen1Rothschild & Co1S&P Global1Wells Fargo Securities1

Topic

All topicsBond mechanics11Duration and convexity6Yield curve and rates5Credit spreads5Credit analysis and ratings13Credit modelling9Primary issuance9Syndication and loans10Structured credit7Covenants and documentation5Liability management5Indian debt markets7Fit8

Level

AnyCoreIntermediateHard

Type

AnyTechnicalBrainteaserMarket viewCaseFit

1. 087What is an NCD, and how does a public NCD issue work in India?Indian debt marketsCoretechnicalIndian debt capital marketsCorporate banking

   Say this

   An NCD is a non-convertible debenture — a plain corporate bond under Indian law, so called to distinguish it from convertible debentures. It can be secured or unsecured, and it is issued either by private placement to institutions, which is most of the market, or by a public issue to retail investors under SEBI's debt listing regulations.

   Then walk it

   1. The private placement route is the market: a company with a board and shareholder authorisation issues to up to 200 identified investors per financial year per class, executes a debenture trust deed, and now must bid it on the electronic bidding platform above a size threshold. Listing on NSE or BSE follows, and settlement is through the depositories.
   2. The public issue route is what retail investors see. It needs a SEBI-filed prospectus, a credit rating, a debenture trustee, a minimum subscription, a fixed subscription window of a few days, and allocation across reserved categories — institutional, non-institutional, high net worth individual and retail.
   3. Who uses public issues: mainly NBFCs and housing finance companies, because they need retail funding and can offer coupons a few hundred basis points above bank deposits. Retail NCD issues from names like the large gold loan and vehicle finance NBFCs are a regular feature of the market.
   4. Secured versus unsecured matters here more than in a developed market. A secured NCD carries a charge over specific assets or a floating charge on receivables, with security cover — commonly 1 to 1.25 times — maintained through the life and certified periodically. Unsecured NCDs, especially subordinated ones that count as Tier II capital for an NBFC, are a different credit entirely.
   5. The trustee has real teeth post-2020 reforms: SEBI strengthened debenture trustee obligations on security creation, monitoring and enforcement after several defaults where security turned out to be incomplete.
   6. The risk to say honestly: a retail investor buying a 10 or 11 percent NCD from an NBFC is taking genuine credit risk at a rating that may be AA or lower, and the IL&FS and DHFL defaults showed what that means. High coupon in the Indian retail market is a credit signal, not a bargain.

   Where candidates lose it

   Treating an NCD as an exotic instrument. It is just a corporate bond, and the useful content is the private placement versus public issue distinction, the security cover mechanic and the trustee's role. Naming the NBFC defaults shows you understand why the retail investor protections were tightened.

   Expect next

   • Why do NBFCs dominate the retail NCD market?
   • What is security cover and who certifies it?
   • How is NCD interest taxed for a retail investor?

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