Interest during long gestation period

You see in Companies Act.

IT is because you are loosing opportunity cost and to compensate this cost , yu are paid Int.

If the Company had started its business and made profits, it would have declared dividend.

But since some companies have long gestation period, they will require some time to make profits. Even they may incur huge losses duirng the initial periods.

hence to keep the share holders intact a company may pay interest out of Capital.

For your reference Sec 208 of the Companies Act deals with it.