Reliance Petroleum's Triple Option Convertible Debentures (A)

EQUITY

Equity refers to the raising of funds from the public by issuing shares from the equity share capital of the company at face value or at a premium. Companies that have a proven track record or new companies promoted by well-known existing companies can issue shares at a premium. In India, the price of the issue is determined in consultation with the Lead Manager for the issue. However, the price has to be justified as per the Malegam Committee recommendations. Though equity is the most common source of raising funds, it involves larger issue expenses including underwriting costs, registration costs, listing fees, lead manager expenses etc...

The TOCDs were made more attractive by allowing the payment to be made in installments of the sum of Rs 60 (Refer Table I) spread over a period of three years. The instrument included two equity shares allotted to the investors at the face value, of Rs 10 each. These two equity shares were alloted as soon as the first instalment of Rs.20 was paid. The remaining amount of Rs 40 comprised a non-convertible portion accompanied by two detachable warrants , each of which could be converted into an equity share by paying Rs.20 per share i.e. at a premium of Rs.10. The rights against the warrants could be exercised between the forty seventh and forty ninth months after the opening date of the issue i.e. September 23, 1993...