Recently NTPC (National Thermal Power Corporation) has announced about bonus debentures to its shareholders. This is a bonus to its existing shareholders. So, what is it and how it is different than bonus shares, and dividend etc?
I got a nice post on MoneyLife which I am going to share with you.
There it is written that it is kind of fixed money to its shareholders. The company need not pay money immediately but then it is a kind of dept to the company. In the process, its debt increases and equity get diluted. The debentures are listed on exchange and can be traded. So, shareholders can sell the debentures.
Read the beautiful article on MoneyLife on What is Bonus Debentures.
More on NTPC Bonus Debentures.