Page 53 - DEBK12

Chapter 10 . Company Accounts—Redemption of Debentures 10.3
Debentures Redemption Investment (DRI)

Rule 18(7)(b) of the Companies (Share Capital and Debentures) Rules, 2014 (as amended from 16th August, 2019)
prescribes that companies that are to redeem debentures, except the exempted companies, shall
“Invest an amount not less than 15 per cent of the nominal (face) value of the debentures to be redeemed by 31st
March of the next year in specified securities on or before 30th April of the current year.”

It further prescribes that the amount remaining invested or deposited, as the case may be, shall not at any time fall
below 15 per cent of the amount of the debentures maturing during the year ending on 31st day of March of that year.
Investment in specified securities is required to be made by all companies except All India Financial
Institutions (AIFIs) regulated by RBI, Banking Companies, Other Financial Institutions, Unlisted Non-
Banking Financing Companies (NBFCs) and Unlisted Housing Finance Companies (HFCs). Following chart
elaborates it further:
S. No. Debentures Issued by Whether Investment to
be made in DRI or Not
1. All India Financial Institutions (AIFIs) regulated by Reserve Bank of India No

2. Banking Companies No
(For both Public Issue and Private Placement of Debentures)
3. Other Financial Institutions (FIs) within the meaning of Section 2(72) of No
the Companies Act, 2013
4. Listed Companies (Other than AIFIs and Banking Companies)
(For both Public Issue and Private Placement of Debentures)
(a) NBFCs, registered with RBI under Section 45–IA of the RBI Act, 1934; Yes
(b) HFCs, registered with National Housing Bank; Yes
(c) Other Listed Companies. Yes

5. Unlisted Companies (Other than AIFIs and Banking Companies)
(For Privately Placed Debentures)
(a) NBFCs, registered with RBI under Section 45– IA of the RBI Act, 1934; No
(b) HFCs, registered with National Housing Bank. No
6. Other Unlisted Companies (Other than NBFCs and HFCs) Yes

• Debentures may be redeemed in lump sum at the time of maturity. They may be redeemed in instalments
by draw of lots or by purchase from Open market. They may be converted into new debentures or shares after
maturity or before maturity.