Non-Convertible Debentures (NCDs) are a popular investment option in India. Many retail investors put money into NCDs because they offer higher interest rates than fixed deposits. But one major concern comes when the NCD issue gets oversubscribed or rejected — investors expect their refund on time. If refunds are delayed, it creates stress and financial planning issues.
What are NCD Refunds?
Whenever you apply for NCDs in a public issue, your application money is blocked. If you don’t get full allotment (or any allotment), the company needs to refund the extra money. This is called an NCD refund.
Typical Timelines for NCD Refunds
SEBI has laid down strict rules regarding refund timelines. Generally:
- Refunds should be initiated within 6 working days after the issue closes.
- If allotment is partial, excess money should be unblocked quickly.
- Refunds are usually processed through ASBA (Application Supported by Blocked Amount), so your bank automatically releases the unutilized funds.
Example: Suppose you applied for ₹1,00,000 worth of NCDs but got allotment of only ₹40,000. The remaining ₹60,000 should be refunded or unblocked in your bank within the timeline.
Common Problems Faced by Investors
Problem 1: Refund delayed beyond 7–10 working days, blocking your funds unnecessarily.
Solution: Contact the registrar of the issue (like KFinTech, Link Intime, etc.) and raise a refund complaint. Also, escalate to SEBI SCORES portal if refund is not processed.
Problem 2: Incorrect bank account details entered during application.
Solution: Always double-check your bank details before applying. If wrong details are submitted, approach the registrar immediately with correct details and cancelled cheque.
Problem 3: Oversubscription leads to very small allotment and refund of large funds.
Solution: Understand the risk of oversubscription before applying. Sometimes applying through multiple Demat accounts within family can balance allotments.
Mistakes to Avoid in NCD Applications
- Not checking cut-off dates: If you apply on the last day, chances of technical errors or bank issues increase.
- Wrong PAN or Demat details: This can lead to rejection and delay in refunds.
- Applying more than financial capacity: If funds are blocked for long, you may face liquidity issues.
- Not keeping records: Many investors forget to note down their application number, making refund follow-up difficult.
Tip: Always save the acknowledgement slip and UPI mandate details when applying for NCDs. It will help in refund tracking.
What If Refund is Not Received?
If your refund is not credited even after 10–12 working days:
- Check with your bank if funds are still blocked under ASBA.
- Visit the registrar’s website using your PAN and application number to track refund status.
- File a complaint with SEBI using SCORES portal if issue is unresolved.
Final Thoughts
NCDs can be a good investment tool, but refund delays often frustrate investors. By understanding refund timelines, avoiding common mistakes, and keeping correct records, you can ensure a smoother experience. Remember, patience and proper follow-up are key if things go wrong.
FAQs on NCD Refunds
+ How many days does it take to get NCD refund?
Usually within 6 working days after issue closure, as per SEBI guidelines.
+ What to do if NCD refund is delayed?
You can contact the registrar, raise a query with your bank, or escalate to SEBI SCORES portal.
+ Can wrong bank details cause refund failure?
Yes, incorrect bank details can delay refunds. Always verify your account details before applying.
+ Is refund automatic in ASBA method?
Yes, in ASBA, the bank unblocks unused funds automatically. But in case of glitches, manual follow-up may be needed.
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