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The Adani family has raised their stake in Ambuja Cements by the conversion of 21.20 crore warrants into shares in a transaction that will see them infusing nearly ₹ 6,661 crore.

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Question

The Adani family has raised their stake in Ambuja Cements by the conversion of 21.20 crore warrants into shares in a transaction that will see them infusing nearly ₹ 6,661 crore.

  1. What is a share warrant?
  2. Mention the head under which Money received against Share Warrants is shown in the Balance Sheet of a company prepared as per Schedule III of the Companies Act, 2013.
Answer in Brief
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Solution

  1. A share warrant is a financial instrument which gives the holder the right to acquire equity shares specified therein at a specified date at a predetermined price.
  2. Shareholder’s Funds.
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RELATED QUESTIONS

From the Following information , compute Debt-Equity Ratio:

                                              Rs.

Long Term Borrowings          2,00,000

Long Term Provision             1,00,000

Current Liabilities                    50,000

Non-Current-Assets              3,60,000

Current -Assets                       90,000


Give the meaning of 'Long-Term Provisions'.


From the Following information, compute Debt-Equity Ratio

Long-Term Borrowings 4,00,000
Long-Term Provision 2,00,000
Current Liabilities 1,00,000
Non-Current-Assets 7,20,000
Current -Assets 1,80,000

From the Following information, compute Debt-Equity Ratio

  Rs
Long-Term Borrowings 8,00,000
Long-Term Provision 4,00,000
Current Liabilities 2,00,000
Non-Current-Assets 14,40,000
Current -Assets 3,60,000

Calculate Debt-Equity Ratio

Particulars Rs
Total Assets 3,50,000
Total Debts 2,50,000
Current Liabilities 80,000

Pick the odd one out: 


Dividend is paid on:


Debt-Equity Ratio of Z Ltd. is 2: 1. State with reason whether the following transactions will improve, decline or will not change the debt-equity ratio:

  1. Conversion of ₹ 3,00,000, 9% debentures into equity shares.
  2. Cash received from debtors ₹ 1,00,000.
  3. Redemption of ₹ 10,00,000, 11% debenture.
  4. Purchase of goods on credit ₹ 4,00,000.

State whether creditors would prefer lending to a company with a high Debt-Equity Ratio or a low Debt-Equity Ratio. Give a reason.


Bajaj Hindustan Sugar, one of the largest sugar and ethanol producers, in order to revive the company, has offered to invest ₹ 2,500 crore as fresh equity of which ₹ 1,000 crore has already been infused.

What will be the effect of this decision of Bajaj Hindustan Sugar on its DebtEquity Ratio?


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