Optionally convt debenture

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sajjala Joshi

sajjala Joshi (Querist)
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16 March 2012 What is the meaning of optionally convertible debentures?

Ajay Mishra

Ajay Mishra (Expert)
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16 March 2012 Hi

Classification on the basis of convertibility
These debentures are issued by a company on the basis of option provided to them for conversion of debenture in the equity shares of the company after a certain period. It may be classified in the following categories:—
(a) Fully convertible debentures (FCDs).—These debentures are converted into equity shares of the company on the expiry of a specified period.
(b) Partly convertible debentures (PCDs).—Partly convertible debentures are divided into two portions, viz., convertible and non-convertible portion. The convertible portion is converted into equity shares of the company at the expiry of specified period. The non-convertible portion is redeemed at the expiry of the specified period in terms of there issue.
(c) Non-convertible debentures (NCDs).—Non-convertible debentures do not have any option to convert the same into equity shares and are redeemed at the expiry of specified period(s).

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