There are several methods for the redemption of debentures, and the method chosen depends on the terms specified in the debenture indenture or trust deed. Here are some common methods:

Payment in Lump Sum:

• The company redeems the entire amount of debentures at once on the specified redemption date.

Purchase in the Open Market:

• The company buys its own debentures from the open market. This method is usually applicable when the market price of the debentures is lower than the redemption price.

Redemption by Draw of Lots:

• Debentures are selected for redemption by drawing lots. This method is often used when the company has the option to redeem only a portion of the debentures.

Conversion into Shares:

• The company may convert the debentures into equity shares. This method is advantageous when the company wants to strengthen its equity base.

Redemption through Sinking Fund:

• The company establishes a sinking fund into which it deposits money at regular intervals. The fund is then used to redeem the debentures at maturity.

Debentures to be Redeemed in Installments:

• The company may specify that debentures will be redeemed in installments over several years rather than all at once.

Call and Pay Off Method:

• The company reserves the right to call for the redemption of debentures at any time. This method provides flexibility to the company.

Mutual Agreement:

• The company and debenture holders may come to a mutual agreement on the terms and conditions of redemption.

The specific method chosen depends on the financial condition of the company, the terms of the debentures, and the company's overall financial strategy. Companies often disclose the method of debenture redemption in their debenture trust deeds or indentures.