Effectively, in this structure, overseas investor in FCCB purchases an embedded option and pays an option premium in the form of lower coupon on FCCB. I hardly need belabor the point that equity is always more expensive than debt capital of whatever kind, including even junk / high-yield bonds!
So I would urge business and industry to fully provide domestic rupee/foreign currency resources to meet potential liability under FCCBs, rather than hope that FCCBs will be converted which, in fact, if anything, can be the case of overseas investors, but certainly not, of issuers of FCCBs! 8.