- An issuer shall be eligible to issue warrants in an initial public offer subject to the following:

(a) the tenure of such warrants shall not exceed eighteen months from the date of their allotment in the initial public offer;

(b) a specified security may have one or more warrants attached to it;

(c) the price or formula for determination of exercise price of the warrants shall be determined upfront and disclosed in the offer document and at least twenty-five per cent. of the consideration amount based on the exercise price shall also be received upfront;

(d) in case the warrant holder does not exercise the option to take equity shares against any of the warrants held by the warrant holder, within three months from the date of payment of consideration, such consideration made in respect of such warrants shall be forfeited by the issuer.