Subsequent to the conversion of warrants, the management group's holding in Ranbaxy would go up to around 33 per cent. The existing holding of the management group is 25 per cent. The holding of foreign institutional investors is around 16 per cent and that of financial institutions is around 11 per cent. According to a statement, these equity shares on allotment will be entitled to receive bonus shares in the ratio 1:1. The bonus issue was announced by the company recently.

The warrants, due for conversion in December 1998, were issued in December 1993 along with 85,000, 12 per cent fully convertible debentures of Rs 300 each to the management group.

Each debenture carried a warrant entitling the holder to convert it into 25 equityshares at a price of Rs 175 each (including Rs 165 on account of share premium) in one or more instalments during the period between the expiry of 12th month and 60th month from the date of allotment -- that is, December 5, 1993, at half-yearly intervals. The management group had subscribed to 85,000 warrants in 1993.

The company through its rights issue in 1993 had also issued 15 per cent non-convertible debentures (NCDs) of Rs 200 each. Each debenture carried a detachable warrant to be converted into one equity share at Rs 125. The initial moratorium was for 3 years and then the warrants were to be converted into equity shares within the next 24 months, i.e. before December 1998.

The conversion will partly restore the promoters' stake in the company, which had come down by nearly 7 per cent when they sold around 30 lakh shares to foreign institutions through a special purpose vehicle (SPV) earlier this year.