Debenture Replace Tick For Free

Conclusion. The provisions of the Companies Act, 2013 authorizes for the process of Conversion of Debentures into Shares. Further, the main reason as to why a company chooses this type of conversion is the economic benefit to the shareholders.

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.

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.

In a sense, all debentures are bonds, but not all bonds are debentures. Whenever a bond is unsecured, it can be referred to as a debenture.In British usage, a debenture is a bond that is secured by company assets. In some countries, the terms are interchangeable.

According to section 71 of the Companies Act, 2013, a company may issue debentures with an option to convert debentures into shares either wholly or partly at the time of redemption. originally issued at a discount can be converted into shares on the basis of the nominal value of the debentures.

Debentures. Debentures generally have a more specific purpose than other bonds. While both are used to raise capital, debentures typically are issued to raise capital to meet the expenses of an upcoming project or to pay for a planned expansion in business.

These instruments can be converted into equity shares of the Company who issued them. The Conversion can be done after a predetermined period. These instruments are always favourable to the investors as they can at any time; convert these convertible bonds into equity shares.