{"id":13868,"date":"2023-08-09T03:29:27","date_gmt":"2023-08-08T21:59:27","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=13868"},"modified":"2025-04-02T07:58:41","modified_gmt":"2025-04-02T02:28:41","slug":"compulsorily-convertible-debentures","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/compulsorily-convertible-debentures\/","title":{"rendered":"Compulsorily Convertible Debentures"},"content":{"rendered":"<h2><strong>About<\/strong> <strong>Compulsorily Convertible Debentures:<\/strong><\/h2>\n<p><strong>\u00a0<\/strong><\/p>\n<ul>\n<li>It is a <strong>type of bond<\/strong> which must be <strong>converted into stock by a specified date.<\/strong><\/li>\n<li>It is classified as a hybrid security, as it is neither purely a bond nor purely a stock.<\/li>\n<li>A debenture comes in two forms\n<ul>\n<li><strong>Non-convertible debenture:<\/strong> It <strong>cannot be converted into equity shares of the issuing company. <\/strong>Instead, debenture holders receive periodic interest payments and get back their principal at the maturity date, just like most bondholders.<\/li>\n<li>The interest rate attached to them is higher than for convertible debentures.<\/li>\n<li><strong>Convertible debentures:<\/strong> <strong>May be converted into the company\u2019s equity after<\/strong> a set period of time. That convertibility is a perceived advantage, so investors are willing to accept a lower interest rate for purchasing convertible debentures.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3>\u00a0<\/h3>\n<h3>What is a debenture?<\/h3>\n<ul>\n<li>A debenture <strong>is a medium- to long-term debt security issued by a company<\/strong> as a means of borrowing money at a fixed interest rate.<\/li>\n<li>Unlike most investment-grade corporate bonds, <strong>it is not secured by collateral<\/strong>.<\/li>\n<li>It is backed only by the full faith and credit of the issuing company.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<hr \/>\n<h3>Q1) What is a bond?<\/h3>\n<p>A bond is a debt instrument issued by governments, municipalities, corporations, or other entities to raise capital. When you buy a bond, you are essentially lending money to the issuer in exchange for periodic interest payments and the return of the principal amount (the initial investment) at a specified maturity date.<\/p>\n<p><strong>Source:\u00a0<\/strong><a href=\"https:\/\/www.thehindubusinessline.com\/news\/foreign-investors-from-mauritius-singapore-under-taxmans-lens\/article67172459.ece\" target=\"_blank\" rel=\"nofollow noopener\"><u>Investors from Mauritius, Singapore, Cyprus under Taxman\u2019s lens for CCD gains<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Compulsorily Convertible Debentures  is a type of bond which must be converted into stock by a specified date.<\/p>\n","protected":false},"author":5,"featured_media":13869,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-13868","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/13868","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=13868"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/13868\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/13869"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=13868"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=13868"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=13868"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}