Read the following case study and answer question.

Rancho Ltd. was running successfully since last 8 years. Post covid there were some financial problems face by firm, like many industries were facing. Due to their past reputation they could manage the permission from SEBI for issuing of shares on 1 Aug, 2022. They also decided to issue 12% Debentures of 100 each at 10% Discount and were to be redeemed at 25% premium in such a way that they could arrange fund of Rs 45,00,000. At the time of issue of Debenture they also issued equity Share of Rs30,00,000 at 20% premium.

Debentures that will be redeemed only at the time of winding up of the company are known as :

Irredeemable Debentures

The correct answer is option (2) : Irredeemable Debentures

Debentures that will be redeemed only at the time of winding up of the company are known as "Irredeemable Debentures."

Irredeemable Debentures, also known as "perpetual debentures" or "non-redeemable debentures," are a type of long-term debt instrument issued by a company to raise capital. Unlike most other debentures, which have a specified maturity date when the principal amount is repaid to the debenture holders, irredeemable debentures do not have a predetermined maturity date for the repayment of the principal. While there is no fixed maturity date for the principal repayment, irredeemable debentures provide regular fixed interest payments to the debenture holders. These interest payments continue for the life of the debenture. The principal of irredeemable debentures is typically repaid to the debenture holders only in the event of the company's winding up or liquidation, after all other obligations and creditors have been settled.