Under the provisions of Companies Act, 1956 debentures cannot be forfeited by company. ... If provided in prospectus, the company pays interest on this amount to debenture-holders at a specified rate.

Is a debenture secured?

Because debentures are debt securities, they tend to be less risky than investing in the same company's common stock or preferred shares. ... In fact, strictly speaking, a U.S. Treasury bond and a U.S. Treasury bill are both debentures. They are not secured by collateral, yet they are considered risk-free securities.

Are debentures permanent?

Debenture put a permanent burden on the earnings of a company. Therefore, there is a greater risk when the earnings of the company fluctuate.