Page 170 - Corporate Finance PDF Final new link
P. 170

NPP













                  170                               Corporate Finance                      BRILLIANT’S


                  The  interest  due  is  paid  to  the  holder  H$mo {X`m OmZo dmcm ã`mO CgH$s nhMmZ na Ü`mZ {XE
                  irrespective of his identity. Generally, coupons  {~Zm {X`m OmVm h¡Ÿ& gm_mÝ`V… {~`aa {S>~|Mg© Ho$ gmW
                  are  attached  to  bearer  debentures  for
                                                              Hy$nÝg {XE OmVo h¢ Omo ã`mO Ho$ ^wJVmZ Ho$ {cE V` {V{W
                  presentation through a bank on due dates for
                                                              na ~¢H$ go àñVwV {H$E OmVo h¢Ÿ&
                  the payment of interest.
                      7. On the basis of convertibility: Deben-   7. H$Ýd{Q>©{~{cQ>r Ho$ AmYma na… {S>~|Mg©, gm_mÝ`
                  tures may be straight debentures or convert-  ñQ´>oQ> {S>~|Mg© `m H$Ýd{Q>©~c {S>~|Mg© hmo gH$Vo h¢Ÿ& EH$
                  ible debentures. A convertible debenture (CD)  H$Ýd{Q>©~c {S>~|Ma (CD) dh {S>~|Ma h¡ {Ogo {ZpíMV g_`md{Y
                  is one which can be converted, fully or partly,
                  into shares after a specified period of time. Thus,  Ho$ níMmV² nyU©V… `m Am§{eH$ Vm¡a na eo`g© _| ~Xcm Om
                  on the basis of convertibility, debentures may  gH$Vm h¢Ÿ& Bg àH$ma H$Ýd{Q>©{~{cQ>r Ho$ AmYma na {S>~|Mg©
                  be classified into three categories:        H$mo VrZ lo{U`m| _| {d^m{OV {H$`m Om gH$Vm h¡…
                   (i) Non-convertible  debentures  (NCDs):    (i) Zm°Z-H$Ýd{Q>©~c {S>~|Mg© (NCDs): NCDs, ewÕ
                      NCDs  are  pure  debentures  without  a     {S>~|Mg© h¡ {OZ_| H$Ýde©Z H$m cjU Zht hmoVm h¡Ÿ&
                      feature of conversion. They are repayable   BZH$m _¡À`mo[aQ>r na nwZ^w©JVmZ {H$`m OmVm  h¡Ÿ&
                      on maturity.  The investor  is entitled  for  {ZdoeH$Vm©, ã`mO Am¡a _ycYZ Ho$ nwZ^w©JVmZ H$m
                      interest and repayment of principal.        A{YH$mar h¡Ÿ&
                   (ii) Fully-convertible  debentures  (FCDs):  (ii) \w$cr-H$Ýd{Q>©~c {S>~|Mg© (FCDs): {S>~|Mg© Omar
                      FCDs are converted into shares as per the   H$aVo g_` H$ÝdO©Z H$s H$s_V Am¡a g_` Ho$ AmYma
                      term of the issue with regard to price and
                      time of conversion. The FCDs carry interest  na FCDs H$mo eo`g© _| ~Xcm OmVm h¡Ÿ& FCDs na
                      rates, generally less than the interest rates  gm_mÝ`V… NCDs H$s VwcZm _| H$_ ã`mO Xa Xr
                      of NCDs  since they  have the  attraction   OmVr h¡ Š`m|{H$ BZ_o g_Vm A§em| _| ~XcZo H$s {deofVm
                      feature  of  being  converted  into  equity  hmoVr h¡Ÿ&
                      shares.
                  (iii) Partly-convertible  debentures  (PCDs):  (iii) nmQ>©cr-H$Ýd{Q>©~c {S>~|Mg©  (PCDs): ^maV  _|
                      PCDs are debentures issued by companies     H§$n{Z`m| Ûmam Omar {H$E OmZo dmco PCDs do {S>~|Mg©
                      in India in two parts: a convertible part   h¢ {OÝh| Xmo ^mJm| _|, Omar {H$`m OmVm h¡Ÿ& EH$ H$Ýd{Q>©~c
                      and a non-convertible part. The investor    ^mJ d Xygam Zm°Z-H$Ýd{Q>©~c ^mJŸ& {ZdoeH$Vm© H$mo
                      has the advantage of both convertibility
                      and non-convertibility blended into one     EH$  hr  {S>~|Ma  _|  H$Ýd{Q>©{~{cQ>r  Am¡a  Zm°Z-
                      debenture.                                  H$Ýd{Q>©{~{cQ>r XmoZm| H$m cm^ àmßV hmoVm h¡Ÿ&

                  (d) Term Loan                               (d) Q>‘© bmoZ
                      Term  loans  are  those  loans  which  are  Q>‘© bmoZ do bmoÝg hmoVo h¢ Omo {H$gr ~¢H$ ¶m {H$gr
                  obtained  from  banks  and  other  financial  ’$m¶Zo§{e¶b BpÝñQ>Q²>¶yeZ go EH$ {ZpíMV g‘¶ Ho$ {bE
                  institutions for a specified period of time. Term  àmßV {H$E OmVo h¢& Q>‘© bmoZ bm±J-Q>‘© S>oãQ> H$m gmog© hmoVo
                  loans are sources of long-term debt. These loans  h¢& ¶o bmoÝg EH$ df© go A{YH$ g‘¶ Ho$ {bE àmßV {H$E
                  are taken for more than one year. The purpose  OmVo h¢& Bg àH$ma Ho$ bmoZ H$m CX²Xoí¶ gm‘mݶV: H$ånZr
                  of such loans is generally to provide a balanced  H$mo ~¡boÝñS> H¡${nQ>b ñQ´>³Ma àXmZ H$aZm hmoVm h¡& Q>‘©
                  capital structure to the company. Term loans  bmoZ do bmoZ hmoVo h¢ {OZH$s ‘¡À¶mo[aQ>r EH$ df© go A{YH$
   165   166   167   168   169   170   171   172   173   174   175