15.4 WARRANTS
15.4.1 Features of Warrants
A warrant is a certificate, normally issued along with a debt instrument, in which a company gives the holder the right to buy a specific number of ordinary shares for a particular price for a specified length of period. The issue of warrants is very common in the USA and many other countries. It is however rare in India. It was Deepak Fertilisers and Petrochemicals Corporation of India that issued warrants for the first time in India in 1987.
Warrants have a number of features. More importantly, they have exercise price at which their holder can buy the issuing firm’s ordinary shares. Similarly, the exercise ratio means the number of shares bought per warrant. Warrants have an expiry date on which the ...
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