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SEBI by way of Circular No. HO/17/11/24(1)2025-DDHS POD1/I/491/2025 dated 18.12.2025 ("NCS Circular")1, has modified the conditions for reduction in denomination of debt securities to include zero coupon debt securities. The NCS Circular modifies the earlier SEBI circular dated 03.07.2024 and Chapter V of the Master Circular for issue and listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper dated 15.10.2025 ("NCS Master Circular").
SEBI has amended Clause 1.3 of Chapter V of the NCS Master Circular to allow issuers to offer debt securities at a reduced face value of INR 10,000 on a private placement basis for either interest-bearing securities or zero-coupon debt securities with fixed maturity and without structured obligations. The earlier provision mandated that such securities must be interest or dividend bearing, which excluded zero coupon instruments that are issued at a discount and redeemed at par, providing returns through the difference between discounted issue price and face value at maturity.
The provisions of the NCS Circular shall be applicable to all issues of debt securities on private placement basis proposed to be listed from 18.12.2025.
Footnote
1 Modification in the conditions specified for reduction in denomination of debt securities.
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