The Board of Directors of Minto Limited wanted to set up a new production plant at Manesar. In the Board Meeting where the budgets were being discussed, one Director suggested that funds can be raised by issuing warrants

As per Regulation 13 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018, an issuer shall be eligible to issue warrants in an initial public offer subject to the following: the tenure of such warrants shall not exceed 18 months from the date of their allotment in the initial public offer; a specified security may have one or more warrants attached to it; 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 25% of the consideration amount based on the exercise price shall also be received upfront; However, in case the exercise price of warrants is based on a formula, 25% consideration amount based on the cap price of the price band determined for the linked equity shares or convertible securities shall be received upfront. 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 3 months from the date of payment of consideration, such consideration made in respect of such warrants shall be forfeited by the issuer. Accordingly, Minto Ltd. can issue warrants after complying with the aforementioned conditions.