Mumbai (Maharashtra) [India], June 23 (ANI): Telecom operator Vodafone Idea said it has allotted 430 crore warrants to Suryaja Investments Pte. Ltd., an Aditya Birla Group entity and a member of the promoter group, raising Rs 1,182.50 crore as part of its planned capital raising exercise.

In an exchange filing the company said the allotment was approved by the Capital Raising Committee of the Board of Directors at its meeting held on June 22.

It stated 'Committee of the Board of Directors of the Company at its meeting..... considered and approved the allotment of 430 Crore warrants to Suryaja Investments Pte. Ltd. (an Aditya Birla Group entity and a member of the Promoter Group) for cash at an issue price of Rs. 11/- per warrant, against receipt of 25 per cent of the issue price i.e. Rs. 2.75 per warrant aggregating to Rs 1,182.50 Crore'.

As per the terms of the allotment, the investor (Suryaja Investments Pte. Ltd) has paid 25 per cent of the issue price upfront, amounting to Rs 2.75 per warrant. This has resulted in an immediate capital infusion of Rs 1,182.50 crore into the company.

Vodafone Idea said each warrant is convertible into, or exchangeable for, one fully paid-up equity shares of the company having a face value of Rs 10 per share at a premium of Re 1 per share. The share price of Vodafone Idea is currently trading at Rs 14.62 per share at NSE.

The company added that the warrants may be converted into equity shares in one or more tranches during a period of up to 18 months from the date of allotment.

A stock warrant is a certificate issued directly by a company that gives an investor the right to buy or sell a specific number of shares at a predetermined price.

So in simple terms, Suryaja Investments has paid only 25 per cent upfront (Rs 2.75 per warrant) and received warrants, not shares yet. These warrants give it the right to buy 430 crore Vodafone Idea shares at Rs 11 per share anytime within 18 months by paying the remaining 75 per cent amount.

Even if Vodafone Idea's market price rises above Rs 11 in the future, Suryaja can still convert the warrants into shares at the pre-agreed price of Rs 11 per share.

For conversion of the warrants into equity shares, the investor will be required to pay the remaining 75 per cent of the issue price, equivalent to Rs 8.25 per warrant. At full conversion, the warrant issue could translate into a total investment of Rs 4,730 crore in the company.

Suryaja Investments Pte. Ltd. is an Aditya Birla Group entity and forms part of Vodafone Idea's promoter group. (ANI)