← A–Z menu

ZCZP (zero coupon zero principal) meaning in simple words

The Plainomics desk4 sources

ZCZP (zero coupon zero principal): instrument is a security issued by a registered non-profit on a Social Stock Exchange that pays no interest and returns no principal: the money funds a social project.

The story

two people, one chai stall

CSR planning time. Riya has a printout from the stock exchange website.

Riya

Our CSR budget is ₹20 lakh this year. Since May, there's a new way to spend part of it: ZCZPs.

Sameer

Sounds like a cough syrup.

Riya

Zero coupon, zero principal. A non-profit lists a project on the Social Stock Exchange, a special section of the stock exchange. We put money in. We get no interest, and we never get the money back.

Sameer

So it's a donation with a stock exchange badge?

Riya

Pretty much. But the non-profit has to report to the exchange on what it did with the money. That's the point: you can see where it went.

Sameer

Can we put all ₹20 lakh in?

Riya

No. The CSR Rules cap it at 10% of what we spend on CSR in the year. 10% of ₹20 lakh is ₹2 lakh.

Sameer

And the other ₹18 lakh?

Riya

The night school, like we planned. ZCZPs start at ₹1,000 per application, so ₹2 lakh is plenty.

The grown-up version

same idea, exact words

A zero coupon zero principal (ZCZP) instrument is a security issued by a not-for-profit organisation registered on the Social Stock Exchange segment of a recognised stock exchange, under Chapter X-A of the SEBI ICDR Regulations. It pays no interest and does not repay the amount invested, which funds a disclosed social project. Under SEBI's framework the minimum issue size is ₹50 lakh, the minimum application is ₹1,000, at least 75% must be subscribed or the money is refunded, and the instrument is held in demat form and cannot be transferred during its tenure. Under rules notified on 27 May 2026, a company may count ZCZP subscriptions as CSR, up to 10% of its total CSR expenditure for that year, and need not do an impact assessment of projects funded this way; subscribing to ZCZPs on a Social Stock Exchange was also added to Schedule VII as an approved CSR activity.

Which rule asks for itChapter X-A, SEBI (ICDR) Regulations, 2018; SEBI Master Circular on the Social Stock Exchange framework (19 January 2026), para 1.4; Rule 4A, Companies (CSR Policy) Rules, 2014, inserted by G.S.R. 415(E) of 27 May 2026; Schedule VII, item (xiii), inserted by G.S.R. 416(E) of 27 May 2026.

Don't mix it up

the usual confusions

  • ZCZP (zero coupon zero principal) ≠ zero-coupon bond

    A zero-coupon bond pays no interest but returns your money in full at the end, and you buy it at a discount. A ZCZP returns nothing at all.

  • ZCZP (zero coupon zero principal) ≠ donation

    A ZCZP is like a donation in that the money doesn't come back. But it is listed on a stock exchange, and the non-profit must report to the exchange on how the money was used.

  • ZCZP (zero coupon zero principal) ≠ CSR

    CSR is the legal duty to spend 2% of average profit on social causes. A ZCZP is one way to spend part of it, capped at 10% of the year's CSR spend.

Three quick sips

no sign-up, nothing saved

1/3 You put ₹1,000 into a ZCZP. What do you get back?

Hindi mein

ज़ीरो कूपन ज़ीरो प्रिंसिपल (ZCZP)

ZCZP सोशल स्टॉक एक्सचेंज पर रजिस्टर्ड किसी गैर-लाभकारी संस्था का ऐसा इंस्ट्रूमेंट है जिस पर न ब्याज मिलता है, न मूल रक़म लौटती है: पैसा किसी सामाजिक प्रोजेक्ट में लगता है।

Sources

  1. Master Circular for the framework on Social Stock Exchange (19 January 2026), SEBI
  2. Norms for issue and listing of ZCZPs by NPOs on NSE Social Stock Exchange, NSE
  3. Companies (Corporate Social Responsibility Policy) Amendment Rules, 2026 (G.S.R. 415(E), 27 May 2026), Ministry of Corporate Affairs
  4. Amendment of Schedule VII to the Companies Act, 2013 (G.S.R. 416(E), 27 May 2026), Ministry of Corporate Affairs