What is debenture capital?

Debenture capital refers to a form of long-term debt financing where a company issues debentures, which are unsecured bonds that promise to pay a fixed interest rate over time. Unlike traditional loans, debentures are often used to raise capital directly from investors without requiring collateral. Investors receive regular interest payments and the principal amount at maturity. This type of financing is commonly used by corporations to fund expansion or other significant projects.