This podcast sheds light on the innovative financial instruments known as zero coupons and zero principal instruments, particularly in the context of social stock exchanges. These instruments serve as a unique bridge between social enterprises or charitable organisations and potential donors. Unlike traditional bonds or equities, zero coupon zero principal instrument don’t yield interest, nor do they return the principal amount upon maturity; instead, they operate as pure donations.

businessLine’s Senior Associate Editor, Lokeshwarri SK, explains that social stock exchanges, such as those affiliated with BSE or NSE, facilitate connections between these entities and donors, providing visibility and credibility to the listed social enterprises. The recent reduction in the minimum issue price and application requirements makes these instruments accessible even to retail investors, allowing wider participation in philanthropy.

Read: Unnati becomes the first entity to list on the social stock exchange

The discussion delves into the benefits of such instruments for donors and emphasises the increased transparency and credibility of social enterprises. Lokeshwarri highlights the recent milestone of Unnati, a not-for-profit organisation issuing India’s first zero coupon zero principal instrument, on the social stock exchange. The funds raised by Unnati will be utilised to train and place underprivileged youth, setting a benchmark for similar initiatives in the future. As interest grows, it anticipates a surge in listings on social stock exchanges, signalling a positive shift in philanthropic dynamics. Listen in. Read the full story here. 

Related Topics