Non convertible Debentures (NCDs)
The carry a fixed variable rate of interest, are redeemable at par, premium, are secured, and can be cumulative non-cumulative.
Partly Convertible Debentures (PCDs)
These have two components: (i) a convertible portion (ii) a non convertible portion. The convertible portion is converted into equity shares at per premium. The non-convertible portion earns interest till redemption generally at par. Such instruments are best suited to second round venture capital financing.
Zero Interest Coupon Bonds Debentures
These can be either convertible or nonconvertible zero no interest rate. The non-convertible bonds are sold at a discount from their maturity while the convertible ones are converted into equity shares at a stipulated price and time offer considerable flexibility and are an appropriate instrument for later stage venture capital financing.
Secured Premium Notes
These are secured, redeemable at premium in lumpsum installments have zero interest and carry a warrant against which equity shares can be acquired. This instruments is also useful for later stage financing.
Deep Discount Bonds
These are issued at a large discount to their maturity value. As a long term instrument: these are not suited to venture capital investment.