Kale Consultants - Promoter Warrants

Board meets on 2nd Sept 2009. Resolves to issue UPTO (why?) 14.4 lac warrants - each convertible to 1 share. Record date is backdated to 1st Aug 2009 (why is this allowed?). This date is used for calculating price according to SEBI's minimum pricing formula. The price so arrived at is Rs 44.

Now on 20th Nov 2009, the warrant allotment is done and I believe (correct me if I am wrong?) the 25% amount is paid only now.
But the price remains Rs 44, while the stock price by now is close to Rs 80. Note that the Rs 44 price is not mentioned in any of the NSE/BSE announcements.

Now what would have happened if the stock had gone down? Say to Rs 20. Would the promoters still buy or take advantage of the UPTO word and buy only token amount?

Should not the SEBI's minimum pricing formula be applied to the date on which 25% (as per SEBI rule) payment is made rather than the record date mentioned above? This appears like a big misuse to me. Effectively getting an option to buy warrants at a past price carried over for 4 months at NIL cost.

And this is no small amount of shares. Its ~10% of the present equity.


Disclaimer: I may be buying/selling/holding any of the shares I talk about in this blog anytime. Do your own due diligence.

Before I start - Disclaimer

I may be buying/selling/holding any of the shares I talk about in this blog anytime. Do your own due diligence.