Convertible debentures are a type of debt instrument issued by companies that can be converted into a predetermined number of the company's equity shares at the option of the holder. They typically offer a fixed interest rate, providing investors with regular income until conversion or maturity. These debentures combine features of both bonds and stocks, allowing investors to benefit from potential price appreciation of the underlying shares while still receiving interest payments. If the company's stock performs well, investors may choose to convert their debentures into shares, potentially increasing their overall returns.