Corporates typically issue FCCBs to raise money in foreign currencies.
These bonds are typically used issued by multinational corporations with a business scenario of globalisation, where they are constantly dealing in foreign currencies.
Under International Financial Reporting Standards (IFRS) provisions, a company must mark-to-market the amount of its outstanding bonds.
In case the company fails to reach the assured price, bond issuer is to get it redeemed.
thus a holder of FCCB has the option of either converting it into equity share at a predetermined price or exchange rate, or retaining the bonds.