Garnet International Warrants Lapse, ₹8.84 Crore Forfeited

All 27,00,000 warrants issued by Garnet International have lapsed as no allottee paid the remaining balance, resulting in the forfeiture of ₹8.84 crore.

Reader Takeaway: Capital raise failed; company retains forfeited funds, but faces future funding questions.

What just happened

Garnet International announced that the 18-month conversion period for 27,00,000 convertible warrants, issued at ₹131 each, has ended without any conversion. The allottees, including promoters and non-promoters, did not pay the remaining 75% balance consideration of ₹98.25 per warrant.

Why this matters

This signifies a complete failure of the planned capital infusion through this preferential issue. While the company will benefit from the non-operating inflow of ₹8.84 crore (₹884.25 lakh) from the forfeited upfront application money, the expected capital has not materialized. Additionally, the 31 defaulting allottees are now ineligible for any future preferential issues by Garnet International for one year.

The backstory

The warrants were allotted on February 10, 2025. The upfront application money constituted 25% of the issue price. The failure of allottees to convert indicates a potential lack of continued interest or financial capacity to invest further.

What changes now

The company's paid-up share capital remains unchanged. The forfeited ₹8.84 crore will be transferred to the company's Capital Reserve Account, subject to Board approval on August 14, 2026. The defaulting allottees face a one-year ban from participating in future preferential issues.

Risks to watch

The primary risk is the failure to raise the intended capital, which may impact the company's financial strategies. The widespread default, including from the promoter group, could also signal underlying issues affecting investor confidence and future fundraising efforts.

Peer comparison

(No verifiable peer comparison data available in the filing. Specific details on other companies' warrant conversions and forfeitures would require external research.)

Context metrics (time-bound)

• Total Warrants Allotted: 27,00,000
• Warrants Converted into Equity: 0
• Lapsed / Defaulted Warrants: 27,00,000
• Upfront Money Forfeited: ₹8.84 crore
• Issue Price per Warrant: ₹131
• Balance Due per Warrant: ₹98.25
• Board Approval Date for Forfeiture Transfer: August 14, 2026

What to track next

Investors should closely monitor Garnet International's future capital-raising plans and its ability to secure funding. The company's performance and strategic decisions following this failed capital raise will be crucial.