The Securities and Exchange Board of India (SEBI) on December 18, 2025, issued a circular regarding modifications in the conditions specified for the reduction in denomination of debt securities.
The following has been stated: -
•SEBI has modified the NCS Master Circular to allow issuance of debt securities and non-convertible redeemable preference shares at a reduced face value of ₹10,000 even if they are zero-coupon instruments.
•Earlier, reduced denomination was permitted only for interest/dividend-bearing securities; the amendment now includes zero-coupon debt securities with fixed maturity and no structured obligations.
•This change recognises market feedback that zero-coupon instruments provide returns through discounted issuance and redemption at par.
•All other provisions remain unchanged, and the amendment applies to all privately placed debt securities proposed to be listed from the date of this circular.
[Circular No.: HO/17/11/24(1)2025-DDHS-POD1/I/491/2025]
