A debenture redemption reserve is an amount a company sets aside from its profits to help repay debentures, under section 71 of the Companies Act, 2013.
Since 2019 the rules have exempted listed companies, NBFCs and housing finance companies from creating a DRR. Most such companies must still invest or deposit a set percentage of the debentures maturing in a year, by 30 April, in specified safe instruments.
A DRR is an accounting reserve, not a separate pool of cash for holders. The security cover and the issuer's cash flows matter more for repayment.
Related
Related terms: Security cover (asset cover) · Debenture trustee
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This page is for information only. It is not investment advice, a credit rating or a recommendation to buy, sell or hold any security. Facts are taken from the issuer's own documents and the sources linked on this page; check them with the source before investing.
