Q. Can an unsecured and unlisted NCD be issued at 0% interest if it is being issued by one listed company to another listed company?
A. Yes, there is no minimum cap on interest rate of a non- convertible debenture. The provisions that relate to this have been listed below.

The Companies Act, 2013
73. Prohibition on acceptance of deposits from public.
(2) A company may, subject to the passing of a resolution in general meeting and subject to such rules as may be prescribed in consultation with the Reserve Bank of India, accept deposits from its members on such terms and conditions, including the provision of security, if any, or for the repayment of such deposits with interest, as may be agreed upon between the company and its members, subject to the fulfilment of the following conditions acceptance of deposits.

(3) Every deposit accepted by a company under sub-section (2) shall be repaid with interest in accordance with the terms and conditions of the agreement referred to in that sub-section.

Section 73 of the Companies Act, 2013 has left discretionary power to the members of the company to set the terms and conditions in relation to securities, interest rates, repayment and so on. As long as the 0% interest rate in question is agreed onto between the company and its members, it may be granted. However, this needs to be in compliance with the RBI regulations and the Companies (Acceptance of Deposits) Rules, 2014.

Companies (Acceptance of Deposits) Rules, 2014[1]
3. Terms and conditions of acceptance of deposits by companies.
(6) No company referred to in sub-section (2) of Section 73 or any eligible company shall invite or accept or renew any deposit in any form, carrying a rate of interest or pay brokerage thereon at a rate exceeding the maximum rate of interest or brokerage prescribed by the Reserve Bank of India for acceptance of deposits by non-banking financial companies.
The rules only place a restriction on companies accepting/renewing/inviting deposits beyond the maximum rate of interest prescribed by the RBI and no minimum rate is given.

RBI Publications[2]
The RBI regulations do not prescribe for a minimum rate of interest, only a ceiling is given. The maximum interest rate payable on public deposits by NBFCs is 12.5 per cent per annum in 2021.[3]

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015[4]
Some SEBI (LODR) Regulations that may be relevant are as follows:
Rule 52 (4) of the SEBI Rules that talk about financial results has the following proviso that may be relevant. It reads as follows:
Provided further that the requirement of this sub - regulation shall not be applicable in case of unsecured debt instruments issued by regulated financial sector entities eligible for meeting capital requirements as specified by respective regulators.

Rule 55 dealing with credit rating is also an important provision. It reads as follows:
55. Each rating obtained by the listed entity with respect to non- convertible debt securities shall be reviewed at least once a year by a credit rating agency registered by the Board.

End-Notes:

1. Ministry of Corporate Affairs, Noti. No. G.S.R. 256(E), dated March 31, 2014, published in the Gazette of India, Extra., Part II, Section 3(i), dated 2nd April, 2014, pp. 23-36, No. 186
2. https://www.rbi.org.in/Scripts/FAQView.aspx?Id=92#:~:text=The%20NBFCs%20are%20allowed%20to,12.5%20per%20cent%20per%20annum
3. 1.2.4.4 Clause B (iv) https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=20316#CH1244
4. https://www.sebi.gov.in/legal/regulations/jan-2020/securities-and-exchange-board-of-india-listing-obligations-and-disclosure-requirements-regulations-2015-last-amended-on-january-10-2020-_37269.html