Debentures: This article will help you uncover the

This article will help you uncover the essentials of debenture investments in India along with their types, benefits, and associated risks. Debentures in India, the debt instruments issued by private entities without asset backing, come in convertible and non-convertible forms. Explore Now! What is a Debenture? A debenture is a type of long-term debt instrument that a company issues to borrow money from investors. In return, the company promises to pay a fixed rate of interest at regular intervals and return the principal amount on maturity. In simpler words, when you buy a debenture, you’re lending money to the company — and in exchange, you earn interest (also known as a coupon). Debentures are similar to bonds but are typically issued by corporates rather than governments. What is Debenture? A debenture can be described as a debt instrument issued by a company to the public in order to raise funds for medium or long-term usage. It is just like a bank loan, with debt obligation and liability for interest payment, but instead of borrowing from a bank, these are issued and traded in the capital market. A debenture is a legal document that states the amount invested or lent, interest due, and the repayment plan. At the conclusion of the term, the investor receives ...