What is third party convertible debentures?

What is third party convertible debentures?

(b) Third Party Convertible Debentures: These debentures are debt with a warrant which allows the investor to subscribe to the equity of third firms at a preferential price vis-a-vis the market price. Usually, the rate of interest of these debentures is lower than prime debt due to the conversion option/facility.

What is convertible debenture and how it is different from non-convertible debenture?

Convertible debentures are a type of debentures that can be converted into equity shares of the company. Non-convertible debentures are defined as the type of debentures that cannot be converted into equity shares of the company.

What is meant by fully convertible debentures and partly convertible debentures?

Partially convertible debentures (PCDs) involve redeeming a fraction of the value of the security for cash and converting the other part into equity. A fully convertible debenture (FCD) involves a full conversion of the debt security into equity at the issuer’s notice.

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What is meant by convertible debentures?

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.

What is difference between share and debenture?

Share is the capital of the company, but Debenture is the debt of the company. The shares represent ownership of the shareholders in the company. On the other hand, debentures represent indebtedness of the company. The income earned on shares is the dividend, but the income earned on debentures is interest.

What are the different types of debenture?

The major types of debentures are:

  • Registered Debentures: Registered debentures are registered with the company.
  • Bearer Debentures:
  • Secured Debentures:
  • Unsecured Debentures:
  • Redeemable Debentures:
  • Non-redeemable Debentures:
  • Convertible Debentures:
  • Non-convertible Debentures:

What is the difference between debenture holders and shareholders?

Debenture holders Shareholders are the owners of the company. Debenture holders are merely lenders to the company and are considered to be creditors. Shareholders actively participate in the decision making process of the company.

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What is difference between debentures and shares?

What are debentures in India?

Debentures are long-term financial instruments issued by a company for specified tenure with a promise to pay fixed interest to the investor. NCD investment can be held by individuals, banking companies, primary dealers other corporate bodies registered or incorporated in India and unincorporated bodies.

Is debenture secured or unsecured?

A debenture is a type of bond or other debt instrument that is unsecured by collateral. Since debentures have no collateral backing, they must rely on the creditworthiness and reputation of the issuer for support. Both corporations and governments frequently issue debentures to raise capital or funds.