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Explain warrant

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Uma asked over 2 years ago

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 acharya answered over 2 years ago

hares (usually one) of its equity share capital at a given exercise price during a given period. The holder of a warrant has the right but not the obligation to convert into equity shares. Thus in the true sense, a warrant signifies optional conversion. In case the investor benefits by capital gains, he will convert the warrants, else he may simply let the warrant lapse. Thus in such cases, there is no possibility of the investor suffering any capital losses.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 narahari answered over 2 years ago

The holder of a warrant has the right but not the obligation to convert into equity shares. Thus in the true sense, a warrant signifies optional conversion. In case the investor benefits by capital gains, he will convert the warrants, else he may simply let the warrant lapse. Thus in such cases, there is no possibility of the investor suffering any capital losses.

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