What is a Debenture?
A Debenture is a debt security issued by a company (called the Issuer), which offers to pay interest in lieu of the money borrowed for a certain period. In essence it represents a loan taken by the issuer who pays an agreed rate of interest during the lifetime of the instrument and repays the principal normally, unless otherwise agreed, on maturity.
These are long-term debt instruments issued by private sector companies. These are issued in denominations as low as Rs 1000 and have maturities ranging between one and ten years. Long maturity debentures are rarely issued, as investors are not comfortable with such maturities
Debentures enable investors to reap the dual benefits of adequate security and good returns. Unlike other fixed income instruments such as Fixed Deposits, Bank Deposits they can be transferred from one party to another by using transfer from. Debentures are normally issued in physical form. However, corporates/PSUs have started issuing debentures in Demat form. Generally, debentures are less liquid as compared to PSU bonds and their liquidity is inversely proportional to the residual maturity. Debentures can be secured or unsecured.
What are the different types of debentures?
Debentures are divided into different categories on the basis of: (1)convertibility of the instrument (2) Security
Debentures can be classified on the basis of convertibility into:
· Non Convertible Debentures (NCD): These instruments retain the debt character and can not be converted in to equity shares
· Partly Convertible Debentures (PCD): A part of these instruments are converted into Equity shares in the future at notice of the issuer. The issuer decides the ratio for conversion. This is normally decided at the time of subscription.
· Fully convertible Debentures (FCD): These are fully convertible into Equity shares at the issuer's notice. The ratio of conversion is decided by the issuer. Upon conversion the investors enjoy the same status as ordinary shareholders of the company.
· Optionally Convertible Debentures (OCD): The investor has the option to either convert these debentures into shares at price decided by the issuer/agreed upon at the time of issue.
On basis of Security, debentures are classified into:
· Secured Debentures: These instruments are secured by a charge on the fixed assets of the issuer company. So if the issuer fails on payment of either the principal or interest amount, his assets can be sold to repay the liability to the investors
· Unsecured Debentures: These instrument are unsecured in the sense that if the issuer defaults on payment of the interest or principal amount, the investor has to be along with other unsecured creditors of the company.
Debentures are long-term financial instruments used by companies to raise capital, representing a loan made by investors to the issuer. They typically pay a fixed rate of interest and are secured against the company's assets or may be unsecured. The main types of debentures include convertible debentures, which can be converted into equity shares; non-convertible debentures, which cannot be converted; and redeemable debentures, which are repayable after a specified period, as opposed to irredeemable debentures, which have no fixed maturity date.
recently which industry/company had issued its debentures
Debentures are a type of debt instrument that companies issue to raise capital, representing a loan made by investors to the issuer. Examples include convertible debentures, which can be converted into equity shares, and secured debentures, which are backed by specific assets of the company as collateral. Other types include unsubordinated debentures, which have priority over other debts in case of liquidation, and zero-coupon debentures, which do not pay interest but are issued at a discount to their face value.
Under company law, borrowing powers refer to the authority granted to a company to raise funds through loans or other financial instruments. This includes the ability to issue debentures, which are a type of debt security representing a loan made to the company by investors. Debentures typically have fixed interest rates and specified repayment terms, allowing companies to secure capital without diluting ownership. The borrowing powers and terms of debenture issuance are usually outlined in a company's articles of association and subject to regulatory compliance.
YES!
Debentures are long-term financial instruments used by companies to raise capital, representing a loan made by investors to the issuer. They typically pay a fixed rate of interest and are secured against the company's assets or may be unsecured. The main types of debentures include convertible debentures, which can be converted into equity shares; non-convertible debentures, which cannot be converted; and redeemable debentures, which are repayable after a specified period, as opposed to irredeemable debentures, which have no fixed maturity date.
recently which industry/company had issued its debentures
recently which industry/company had issued its debentures
Debentures are a type of debt instrument that companies issue to raise capital, representing a loan made by investors to the issuer. Examples include convertible debentures, which can be converted into equity shares, and secured debentures, which are backed by specific assets of the company as collateral. Other types include unsubordinated debentures, which have priority over other debts in case of liquidation, and zero-coupon debentures, which do not pay interest but are issued at a discount to their face value.
Under company law, borrowing powers refer to the authority granted to a company to raise funds through loans or other financial instruments. This includes the ability to issue debentures, which are a type of debt security representing a loan made to the company by investors. Debentures typically have fixed interest rates and specified repayment terms, allowing companies to secure capital without diluting ownership. The borrowing powers and terms of debenture issuance are usually outlined in a company's articles of association and subject to regulatory compliance.
YES!
Yes
The amount of debentures maturing refers to the total value of debentures that are set to be repaid by the issuer at the end of their term. This figure is typically outlined in the company's financial statements or debt schedule and represents a liability that the company must fulfill. The maturity of debentures can impact the company's cash flow and financing strategy as it approaches the repayment date.
Yes,debenture in the balance sheet because debentures is liability for the company so it comes debit side in balance sheet in the books of the company.
Debentures are credit instruments. Companies have to pay fixed interest to the debentures holders even though the company is running on loss. An the time of liquidation also the company have to repay the amount to debenture holders before paying it to share holders.
OFCD - optionally fully convertible debentures. these are the debentures that can be converted into equity at any time at the rate of interest decided by the company
weird not a frod company and nbsc company.fully industrial company.