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The debentures which cannot be converted into equity shares are called as non-convertible debentures.

Solution. Fully convertible debentures are converted into equity shares on maturity.

A fully convertible debenture (FCD) is a type of debt security in which the entire value is convertible into equity shares at the issuer's notice. The main difference between FCDs and most other convertible debentures is that the issuing company can force conversion into equity.

A convertible debenture provides regular interest income through coupon payments and repayment of principal amount on maturity. The decision to convert these debentures into equity shares lies with the holder as they are the creditors of the company. Sometimes, the company may also possess these conversion rights.

The Companies Act, 2013 authorizes for the Conversion of Debentures into Equity Shares. The Company does this type of Conversion for economic benefit to shareholders.

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.

Debentures are converted into equity shares on maturity. The conversion date and rate of conversion is stated in the prospectus.

The debenture can typically only be converted into stock after a predetermined time, as specified in the bond's offering. A convertible debenture will usually return a lower interest rate since the debt holder has the option to convert the loan to stock, which is to the investors' benefit.

Advantages and Disadvantages of DebenturesFinancing through them is less costly as compared to the cost of preference or equity capital as the interest payment on debentures is tax deductible. The company does not involve its profits in a debenture.

A debenture is a document put in place when a loan is granted to protect the company or individual which lends money to a business. It gives lenders a priority position in the list of companies or people who'll get their payment if a company becomes insolvent.