Unnati ZCZP Bonds

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December 15, 2023

Why in news?

Social stock exchange sees 1st listing with Unnati Foundation 1st entity in December 2023.

What are Social Stock Exchanges (SSE)?

  • A separate segment of the existing Stock Exchange that can help social enterprise’s to raise funds from public through the stock exchange mechanism.
  • It will act as a medium between Social Enterprises and fund providers.
  • SEBI had permitted social enterprises registered on these exchanges to raise funds through zero coupon zero principal bonds (ZCZP) in 2022.

What is a ZCZP instruments?

  • ZCZP – Zero Coupon Zero Principle are financial instrument that are included in the list of securities under Securities Contracts (Regulation) Act, 1956.
  • They do not give any interest, and investors will not get any money back on the maturity of the bond.

Debt Security (Bond)

ZCZP instrument

It is like a loan.

It is not a loan but a donation.

It makes interest payments and the principal when the bond matures.

It doesn’t makes interest payments and the principal on maturity.

  • Eligibility criteria for issuanceOnly by NPO that are registered with Social Stock Exchange (SSE).
  • ZCZP can only be issued for a specific project with specific tenure.
  • The project must fall under the list of eligible activities under SEBI (ICDR) Regulations, 2018.
  • Issuance - They are issued through private placement or public issuance.
    • Minimum issue size – Rs. 50 Lakh (originally Rs.1 crore)
    • Minimum application size – Rs.10, 000 (originally Rs.2 lakh)
    • Minimum subscription required - 75% of the funds proposed
  • Trade – They shall be issued in dematerialized form only.
  • They are not available for trading in the secondary market, but they can be transferred to legal heirs.
  • Maturity – It will mature when the project for which they are raised terminate, or 12 months from the date of allotment.

What is Unnati ZCZP Bonds?

  • Issuer – SGBS Unnati Foundation, an NPO formed in November 2011.
    • Unnati – Vocational training program for underprivileged and unemployed youth in the age group of 18 to 25 years.
    • UNXT – 1 month training programme for final year students at government colleges.
    • Sugam – A grassroot entrepreneurship accelerator helping non-urban youth to develop scalable businesses.
  • Need of funds –To train up to 10,000 graduating youth from government colleges in Uttar Pradesh, Madhya Pradesh, Karnataka, Andhra Pradesh and Tamil Nadu to help them secure employment.
    • The youth will be trained for 165 hours (classroom learning and self-learning content on a mobile application).
    • Cost per head for training would be ₹2,000 per youth.
  • Specifics – It is a public issue with face value of ₹1 each of ₹2 crore that will be listed on the NSE.

Unnati ZCZP bond is the 1st such listing on SSE segment in India.

  • This listing will be displayed along with other such future bond issuances on the social stock exchange page on the NSE website.
  • It raised Rs 1.8 crore from 4 investors and include brokerage firm Zerodha and National Bank for Agriculture and Rural Development (NABARD).

What are the benefits of these ZCZP instruments?

  • There are obviously no pecuniary benefits from these instruments as it is akin to a donation made to a charity.
  • Greater transparency - The end use of the funds can also be monitored since the enterprises have to disclose details of money utilised and balance amount remaining to exchanges.
  • Visibility to the social enterprises - It helps them to approach the public at regular intervals if they can show good outcomes.

Quick Facts

  • Social enterprises – Enterprise that are engaging in the activity of creating positive social impact and that meets primacy of their social intent.
    • Not-for-profit organization
    • For profit social enterprise


  1. The Hindu Business Line| Unnati ZCZP Bonds
  2. NSE Archives| Zero Coupon Zero Principle Instrument
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