Forfeiture of warrants due to non-exercise of conversion into equity shares
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The Board of Directors of Kay Power and Paper Ltd, at its meeting on October 16, 2025, approved the forfeiture of 16,00,000 warrants that were not converted into equity shares within the 18-month window (deadline October 15, 2025). Two warrant holders — Chandra Trading and Investment Private Limited (13,50,000 warrants forfeited out of 71,00,000 allotted) and Shyam Mohan Gupta (2,50,000 warrants forfeited out of 4,00,000 allotted) — failed to exercise the conversion option. The warrants were originally issued at Rs. 30.10 each, with 25% paid upfront at allotment. Under SEBI ICDR Regulation 169(3), the 25% amount already paid on these unconverted warrants stands forfeited.
For shareholders, this means the company retains the upfront amount paid on these warrants (about Rs. 1.20 crore at 25% of Rs. 30.10 on 16 lakh warrants) as forfeited income, but the expected equity dilution from these warrants will not happen. The stock may see mild negative sentiment as it reflects weak investor confidence or funding constraints among the warrant holders.