Warrant Conversion refers to the exercise of a warrant—a derivative instrument issued by a company—to purchase a specified number of shares at a pre-agreed price before the warrant's expiry date. Warrants are similar to call options but are issued directly by the company, and upon exercise, new shares are issued (diluting existing shareholders). Companies often issue warrants as sweeteners alongside debt instruments or as part of promoter equity infusion plans. Monitoring outstanding warrants is important for investors assessing potential share capital dilution.
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