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A compulsory convertible debenture (CCD) is a type of bond which must be converted into stock by a specified date. It is classified as a hybrid security, as it is neither purely a bond nor purely a stock.

Issuance of compulsorily convertible debentures Deposit is defined under Section 2 (31) of the Companies Act, 2013. The definition includes any receipt of money by way of deposit or loan or in any other form by a company. However, certain categories of amount, as prescribed by RBI may be excluded.

A convertible debenture is a hybrid financial instrument that has both fixed income and equity characteristics. In its simplest terms, it is a bond that gives the holder the option to convert into an underlying equity instrument at a predetermined price.

A convertible debenture is a type of long-term debt issued by a company that can be converted into shares of equity stock after a specified period. Convertible debentures are usually unsecured bonds or loans, often with no underlying collateral backing up the debt.

Applicability Cases of Compulsorily Convertible Debentures Section 71(1) permits companies to issue debentures with an option to convert such debenture into shares, either wholly or partly at the time of redemption, provided that it shall be approved by a special resolution passed at a general meeting.

Compulsorily Convertible Debentures (CCD) CCD'S can be issued at any amount. There is no minimum amount criteria. Convertible Notes can be issued without prior valuation. The company raising funds should be recognized as a Startup Company by the government.

In a simple sense, the Conversion of Debentures into Equity Shares means to change the loan liability into a capital liability. After the Conversion of Debentures into Equity Shares, the Debenture Holder becomes Shareholder. The shareholders will get the right to vote.