D E B E N T U R E S

ANANYA V P
WHAT ARE DEBENTURES ?
A debenture is a type of financial instrument or security that represents a
debt owed by an entity, typically a corporation or a government, to investors. When an
entity issues a debenture, it is essentially borrowing money from investors and promising
to repay the principal amount along with interest at a specified future date. Debentures are
commonly used by companies and governments to raise capital for various purposes, such
as funding expansion, capital projects, or debt refinancing.
 ISSUE AND REDEMPTION OF
DEBENTURES
The issuance and redemption of debentures involve the
processes of raising capital by issuing debentures and repaying the debenture
holders when the debentures mature or are called for redemption.
ISSUANCE OF DEBENTURE
The issuance of debentures is the process by which a company or organization raises capital by
offering debentures to investors. This process typically involves several steps:

• Board approval

• Prospectus or offering document

• Regulatory compliance

• Marketing and Distribution

• Subscription and Allotment

• Listing

• Issuance and Documentation

REDEMPTION OF DEBENTURE
Redemption of debentures refers to the process of repaying the principal amount to the debenture
holders when the debentures mature or when they are called for redemption by the issuer. The redemption
process involves the following steps:

• Maturity date

• Interest payments

• Redemption notice

• Repayment

• Accounting and Record keeping