What is Debentures: Definition & Meaning Explained

Definition of Debentures

A debenture is a legal certificate that a company issues in exchange for a long-term unsecured loan. A debt instrument like a debenture is issued by companies who want to fund their business without diluting existing shares.

The components of a debenture are as follows:

Principal: The loan amount or the money lent by an investor
Tenure: The duration of the loan
Interest rate: The rate of interest
Repayment: Terms and conditions of the amount to be repaid

Debenetures can also be issued by small-size companies who may not be creditworthy enough to secure a loan from traditional lenders. Hence, the unsecured aspect of the loan may help achieve their objective.

Internal Rate Of Return

Internal Rate Of Return (IRR) is used to measure the compound annual return generated by a financial asset. IRR is a tool in Discounted Cash Flow financial analysis that operates by bringing the Net Present Value (NPV) of cash flow to zero. That’s why IRR can be used to compare a variety of financial assets from the equity market or bond market to real estate.

Equity Capital Markets

Equity capital markets (ECMs) are a place where companies raise money by offering equity shares to financial firms, institutional investors, and retail investors.

Fund raising of this kind is often done through private placements or Initial Public Offerings (IPOs) in the primary market, which is a part of the ECM. The biggest IPOs in India are all part of the ECM.

The equity capital market is also a place where shares, futures, options, and other financial instruments are traded. This part of the ECM is known as the secondary market. The stock market is a popular example of an ECM.

Holding Company

A holding company is a parent organization that holds a controlling interest in one or more subsidiary companies. The goal of a holding company is not to create products or services but to hold financial securities, typically in the form of equity, in other companies that create products or services. For example, Raise Financial Services is a holding company while Dhan is its subsidiary.

Intrinsic Value Of Share

Intrinsinc value of a share is the actual value of a stock, not the value at which it is trading in the secondary market. There are multiple ways to calculate the intrinsic value of a share. The most common method include discounted cash flow while adjusting the time value of money to calculate the present value of the stock is also a popular method.

Cost Inflation Index

A Cost Inflation Index or CII is used to calculate a financial security’s price after adjusting for inflation.

Cost Of Carry
Cost Of Revenue
Cover Order
Covered Call Option
Covered Interest Arbitrage
Covered Put
Cross Currency
Currency Futures
Currency Options
Currency Trading
Current Assets
Current Liabilities
Current Ratio
Custodian
Cyclical Stocks

*All securities mentioned on this website are exemplary and not recommendatory.

We are bullish on India, we are bullish on India's prospects to be one of the largest economies in the world. We believe that the stock market provides a unique opportunity for all of India's traders and investors to participate in the growth story of the country.

Yet, most investing & trading platforms in India have remained more or less the same over the past decade. Times have changed and retail traders and investors have become smarter about managing their trades and money. Modern traders & investors require an online trading platform that helps them keep up with the technological advancements of our time.

That's why we're building Dhan - to help you trade, to help you invest, and to help you participate in India's growth stock via the stock market with awesome features and an incredible experience.

We are doing so by giving you access to not just one but 6 products within the Dhan ecosystem:

Dhan App: The only online trading app you need for buying and selling equity, futures, options, commodity, and currency.
Dhan Web: Trade on the big screen across segments with our web trading platform.
Options Trader App: A dedicated option trading app built for India's F&O traders.
Options Trader Web: Love big screens and F&O trading? Use our web option trading platform.
Dhan + TradingView: The magic of Tradingview charts for free with the Lightning-Fast experience of Dhan on tv.dhan.co.
Connect to TradingView: Our Tradingview broker integration allows you to trade in Stocks, Futures, and Commodities directly from tradingview.com via Dhan.

This means that with Dhan, you'll be able to start:

Lakhs of users already trust Dhan for their online stock trading and investing needs. Dhan is growing rapidly because of the love we receive from SuperTraders and Long-Term Investors who acknowledge that the platform is innovating for them, building super useful features that help them do everything from investing in stock market to trading F&O like a pro on the Tradingview charts and much more.

While we are growing, we will always remember why we started building in the first place - you. Our user-first approach will always be at the heart of our philosophy. Come join us on this incredible journey!

Try it out, you can close your account at anytime using this link.

SEBI Stock Broker Registration No: INZ000006031 | Depository Participant (CDSL) ID: IN-DP-289-2016
Exchange Membership No. : NSE: 90133 | BSE: 6593 | MCX: 56320
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For any query / feedback / clarifications, email at help@dhan.co.

In case of grievances for any of the services rendered by Moneylicious Securities Private Limited, please write to grievance@dhan.co (for NSE, BSE and MCX) or grievancedp@dhan.co (for Depository Participant). Please ensure that you carefully read the Risk Disclosure Document as prescribed by SEBI, our Terms of Use and Privacy Policy. Compliance Officer: Mr. Manish Garg and Mobile: 8655740961 Email: complianceofficer@dhan.co To lodge your complaints using SEBI SCORES, click here.

DHAN is a brand owned by Moneylicious Securities Private Limited. All DHAN clients are registered under Moneylicious Securities Private Limited. Clients are advised to refer to our company as Moneylicious Securities Private Limited when communicating with regulatory authorities.

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Disclaimer: Investment in the securities market are subject to market risks, read all the related documents carefully before investing. Brokerage will not exceed the SEBI prescribed limit

Attention investors:

Stock brokers can accept securities as margins from clients only by way of pledge in the depository system w.e.f September 01, 2020.
Update your e-mail and phone number with your stock broker / depository participant and receive OTP directly from depository on your e-mail and/or mobile number to create pledge.
Check your securities / MF / bonds in the consolidated account statement issued by NSDL/CDSL every month.

Note: As a policy we do not give stock tips or recommendations and have not authorized anyone to give this on behalf of us. If you know anyone claiming to be a part of Dhan / Moneylicious / Raise or our associate companies or partners and offering such services, please report us on help@dhan.co. Important Information for Investors: To prevent unauthorized transactions in your trading / demat account, do not share your account details, credentials or any personal details with anyone. Keep your mobile number updated with your Stock Broker, Depository Participant and ensure that the same is registered with Stock Exchanges, Depository and KRAs. You will receive alerts and information on your registered mobile number / email for debit and other important transactions in your demat account directly from CDSL / Exchange on the same day. KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (Stock Broker, DP, Mutual Fund, etc.), you need not undergo the same process again when you approach another intermediary. No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account. This is issued in the interest of investors.

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Debentures