Regulation 235 - Issue of warrants - Securities And Exchange Board of India (Issue Of Capital And Disclosure Requirements) Regulations, 2018

Issue of warrants 235. An issuer shall be eligible to issue warrants in an initial public offer subject to the following: a) the tenure of such warrants shall not exceed eighteen months from their date of allotment in the initial public offer; b) A specified security may have one or more warrants attached to it; c) the price or formula for determination of exercise price of the warrants shall be determined upfront and disclosed in the offer document and at least twenty-five per cent. of the consideration amount based on the exercise price shall also be received upfront; Provided that in case the exercise price of warrants is based on a formula, twenty-five per cent. consideration amount based on the cap price of the price band determined for the linked equity shares or convertible securities shall be received upfront.; d) in case the warrant holder does not exercise the option to take equity shares against any of the warrants held by the warrant holder, within three months from the date of payment of consideration, such consideration made in respect of such warrants shall be forfeited by the issuer.