Buy back of shares can not be done out of the following sources:

Existing Debentures holders

The correct answer is option 4- Existing Debentures holders.

When a company purchase its own shares, it is called ‘Buy-back of Shares’. Section 68 of The Companies Act, 2013 provides that the company can buy their own shares from either of the following sources :
(a) Existing equity shareholders on a proportionate basis
(b) Open Market
(c) Odd-lot shareholders
(d) Employees of the company

The company can buy back its own shares either from the free reserves, securities premium or from the proceeds of any shares or other specified securities. In case shares are bought back out of free reserves, the company must transfer a sum equal to the nominal value of shares bought back to ‘Capital Redemption Reserve Account’.

The following procedures have been laid down for buy back of shares :
(a) The Articles of the Association must authorise the company for the buy back of shares.
(b) A special resolution must be passed in the companies’ Annual General Body meeting.
(c) The amount of buy back of shares in any financial year should not exceed 25% of the paid-up capital and free reserves.
(d) The debt-equity ratio should not be more than a ratio of 2:1 after the buy back.
(e) All the shares of buy back should be fully paid-up.
(f) The buy-back of the shares should be completed within 12 months from the date of passing the special resolution.
(g) The company should file a solvency declaration with the Registrar and SEBI which must be signed by at least two directors of the company