Public Deposits - Acceptance of Scope and provision of Companies (Acceptance of Deposits) Rules, 1975 explained

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....2(b)(x) : WHETHER AMOUNTS RAISED BY ISSUE OF UNSECURED BONDS OR DEBENTURES WHICH HAVE AN OPTION TO CONVERT THEM INTO SHARES ARE EXEMPT FROM THE PURVIEW OF DEPOSITS AS DEFINED IN THE RULE 1. In terms of rule 2(b)(x) the amounts raised by issue of bonds or debentures which have an option to convert them into shares are exempted from the purview of deposits as defined in clause (b) of rule 2. The fo....

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....to shares, only the convertible portion of the debenture is exempt in terms of the provisions of rule 2(b)(x). Even in regard to the convertible portion of debentures, once the period of conversion is over the unconverted portion of debentures would acquire a character of loan and would fall with the definition of deposits like other loans provided they are not secured by mortgage of immovable pro....