A Debenture Holder is an investor or individual who owns a companyís debentures ó a type of debt instrument used by corporations to raise funds from the public. By purchasing a debenture, the holder effectively lends money to the issuing company for a fixed period in exchange for regular interest payments and repayment of the principal amount upon maturity.

Unlike shareholders, debenture holders are creditors of the company and not owners. This means they do not have voting rights or participation in management decisions but enjoy a higher claim on the companyís assets in case of liquidation. Their primary return comes from the fixed interest rate, also known as the coupon rate, which is paid periodically ó usually semi-annually or annually.

Debentures can be of different types, such as secured or unsecured, convertible or non-convertible. In the case of secured debentures, the debenture holderís investment is backed by specific company assets, providing an added layer of protection. Convertible debentures, on the other hand, give holders the option to convert their holdings into equity shares after a specified period, potentially offering capital appreciation.

Since debentures represent a borrowing obligation, companies are legally required to repay the amount due to debenture holders, irrespective of their financial performance. This makes debentures relatively less risky compared to equities, especially for investors seeking steady and predictable income.

In India, the rights and obligations of debenture holders are governed by the Companies Act, 2013 and regulations set by the Securities and Exchange Board of India (SEBI). Companies are also required to appoint a Debenture Trustee to safeguard the interests of debenture holders and ensure that all contractual terms are met.

In summary, a Debenture Holder is a key stakeholder in corporate financing, providing debt capital in exchange for fixed returns. While they do not share ownership, their investment offers stability, regular income, and a degree of safety, making debentures a preferred choice for conservative investors.