Full formBusiness & Corporate
FCDstands forFully Convertible Debenture
Full Form of FCD
What is FCD?
A Fully Convertible Debenture (FCD) is a type of debt instrument issued by companies that can be fully converted into equity shares of the issuing company after a specified period. In India, FCDs are a popular hybrid financing tool used by corporations to raise capital without immediate dilution of ownership, as conversion typically occurs at a future date at a predetermined price. They combine features of both debt and equity, offering investors fixed interest payments initially and the potential for capital appreciation upon conversion. FCDs are traded on stock exchanges like the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) and are regulated by the Securities and Exchange Board of India (SEBI). They are commonly used in initial public offerings (IPOs) and rights issues to attract long-term investors. The conversion ratio and terms are clearly defined in the offer document. For students preparing for competitive exams like CA, CFA, or MBA finance, understanding FCDs is essential as they frequently appear in questions related to capital structure, hybrid securities, and corporate finance. FCDs provide companies with flexible funding options while giving investors an opportunity to participate in future equity growth.
FCD का फुल फॉर्म
पूर्ण रूपांतरणीय ऋणपत्र
Example
The board approved the issuance of FCDs worth ₹500 crore to fund the new manufacturing project.
FCD — frequently asked questions
What is the full form of FCD?
The full form of FCD is Fully Convertible Debenture, a hybrid security that converts into equity shares after a set period.
How are FCDs different from NCDs?
FCDs convert into equity shares, while Non-Convertible Debentures (NCDs) remain debt instruments and do not convert into equity.
Are FCDs listed on Indian stock exchanges?
Yes, FCDs are listed and traded on stock exchanges like BSE and NSE, subject to SEBI regulations.