Debenture Modify For Free

The debentures that can be converted into equity shares within a specified period of time are known as convertible debentures.

In a simple sense, the Conversion of Debentures into Equity Shares means to change the loan liability into a capital liability. After the Conversion of Debentures into Equity Shares, the Debenture Holder becomes Shareholder. The shareholders will get the right to vote.

As per SEBI guidelines, the conditions of the creation of DRR (Debenture Redemption Reserve) do not apply to the conversion method. The debenture holders have the option to convert their debentures in the case when the conversion is to be made at or after 18 months but before 36 months of allotment.

A convertible debenture can be transformed into equity shares after a specific period. The option of converting debentures into equity shares lies with the holder. A convertible debenture will provide regular interest income via coupon payments and repayment of the principal amount at maturity.

A convertible debenture is a type of long-term debt issued by a company that can be converted into shares of equity stock after a specified period. Convertible debentures are usually unsecured bonds or loans, often with no underlying collateral backing up the debt.

Companies use debentures as fixed-rate loans and pay fixed interest payments. However, the holders of the debenture have the option of holding the loan until maturity and receive the interest payments, or convert the loan into equity shares.

In corporate finance, a debenture is a medium- to long-term debt instrument used by large companies to borrow money, at a fixed rate of interest.The interest paid to them is a charge against profit in the company's financial statements. The term "debenture" is more descriptive than definitive.

ACCOUNTANCY. document issued under the seal of the company. It is an acknowledgment of the loan received by the company equal to the nominal value of the debenture. It bears the date of redemption and rate and mode of payment of interest.

Bonds are generally issued during the inception of a business whereas Debentures are issued during the course of the business. Bonds are backed up by a collateral or security or a physical asset but Debenture are backed up by the promise made by the issuer.The rate of interest is higher in Debenture compare to a bond.

Debentures cannot be issued with voting rights. On issue of debenture, a Company shall create a Debenture Redemption Reserve (DRR) out of the profits of the company available for payment of dividend and the amount credited to such account shall not be utilised by the company except for the redemption of debentures.