Types of Warrants

The warrants can be classified into different types. They are:

Detachable Warrants

These warrants are issued with most debentures, like convertible or non-convertible or equity, and are immediately detachable. They are traded in the secondary market as separate instruments.

Example: M/s. Patron Engineering Construction Co. Ltd. has issued, during March 20x3, Rs.5,00,000 - 14% secured non-convertible debentures, with detachable warrants, aggregating to Rs.500 lakh.

M/s. Malavika Steel Ltd. has announced a 5.70 crore equity shares of Rs.10 each for cash at a premium of Rs.30 attached with optional tradeable warrants.

Puttable Warrants

These warrants confer a right on the investor to sell the warrant back to the company at a fixed price before the expiry of a fixed period thereby limiting his risk.

Wedding Warrants

These warrants are attached to the host debentures and can be exercised only if the host debenture is surrendered.

Naked Warrants

These warrants are issued separately and not as a part of a bond or a debenture issue. The holder has the option of converting the warrant into debt or equity or some other asset of the issuer.

 

Posted Date: 9/10/2012 8:04:11 AM | Location : United States

Ask an Expert

Related Discussions:- Types of warrants, Assignment Help, Ask Question on Types of warrants, Get Answer, Expert's Help, Types of warrants Discussions

Write discussion on Types of warrants
Your posts are moderated

Write your message here..

Related Questions

Explain about cash forecasting method, Q. Explain about Cash Forecasting Me... Q. Explain about Cash Forecasting Method ? Under this method an approximate is made of cash receipts and payments for the next period. Estimated cash receipts are added to the

Return on common equity finance basics, At the end of the fiscal year endin... At the end of the fiscal year ending June 30, 2003, Microsoft reported common equity of $64.9 billion on its balance sheet, with $49.0 billion invested in financial assets (in the

Cross-sector analysis, Cross-Sector Analysis: The growth of a country d... Cross-Sector Analysis: The growth of a country depends upon how fast a country can adapt to deregulation and internationalization. Deregulation and internationalization put com

Audit opinion, Clean Opinion - AUDIT opinion not qualified for any material... Clean Opinion - AUDIT opinion not qualified for any material scope restrictions nor departures from GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP). Also called UNQUALIFIED OPINION

Valuing an option-free bond, To value an option-free bond, we must de... To value an option-free bond, we must determine the on-the-run yield curve for the particular issuer whose bond we have to value. This on-the-run yield curve used

Describe the general pattern of cash flows, Describe the general pattern of... Describe the general pattern of cash flows from a bond with a positive coupon rate. Cash flows from a bond along with a positive coupon rate contain periodic interest payments an

Dividend payout ratio, Dividend Payout Ratio The percentage of earnings... Dividend Payout Ratio The percentage of earnings or profit paid to shareholders in dividends. Computed as:   The payout ratio gives an idea about how well earning

Public corporations ought to tender audited financial statem, What are some... What are some of the government requirements imposed on a public corporation that are not imposed on a private, closely held corporation? Public corporations ought to tender au

Explain rate of the stock turnover, Q. Explain Rate of the stock turnover? ... Q. Explain Rate of the stock turnover? Rate of the stock turnover: this is high degree of the inverse co relation between the quantum of the working capital requirement and the

Define trustworthy collateral from the lenders perspective, What is trustwo... What is trustworthy collateral from the lenders' perspective?  Explain whether accounts receivable and inventory are trustworthy collateral. Assets which are readily marketable