Question

राइट ए नोट ऑन रिटन एस टू अलॉटमेंट​

Answer 1

Definition of 'Equity Warrants'

Definition: Equity warrants are instruments that bestow upon the holder of the instrument the right to buy a particular stock at a predetermined price within a stipulated time frame. However, to gain this right, the buyer of such warrants usually needs to make an upfront payment to the warrants issuer. On exercise of such warrants, fresh shares are issued by the issuer company.

Warrants are also issued by the way of preferential allotment to promoters, institutional investors, and other strategic investors. This allows such entities to increase their stake if the performance of the underlying business (and thus the stock) is on a high growth path.