Compulsorily Convertible Debentures (CCDs)

Recently, the Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that Compulsorily Convertible Debentures (CCDs) are in the nature of borrowed fund and continue to be in debt till conversion thereof into shares.

  • Under Section 2(30) of the Companies Act, 2013 a debenture is a debt instrument for the company. It includes debenture stock, bonds or any other instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not.
  • Unlike most investment-grade corporate bonds, it is not secured by collateral.

A debenture comes in two forms:

    1. Non-convertible Debenture cannot be converted into ....
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