Promoters, who have skin in the game, often know more about the prospects of their company than anyone else. For investors, it therefore makes sense to closely track firms where promoters continue to show confidence despite ongoing market volatility.
Apart from quarterly shareholding disclosures, one useful indicator is for companies where promoters issue or convert warrants at prices higher than the prevailing market price.
At first glance, such moves may appear counterintuitive. Why would promoters buy shares at a premium when the stock is available cheaper in the market? However, these transactions are worth tracking closely as they often reflect promoter confidence in the company’s long-term business outlook.
Kranthi Bathini, Director of Equity Strategy at Wealth Mills Securities, said, “Whenever promoters opt for warrant conversion, it reflects their confidence in the company’s business prospects. It indicates the underlying strength of the company and makes the stock worth studying or keeping on a watchlist.”
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In simple terms, warrants are like stock options. Promoters receive the right to acquire fresh shares from the company at a predetermined price by initially paying 25% upfront. After allotment, they can convert these warrants into equity shares anytime within 18 months by paying the remaining amount, irrespective of the prevailing market price.
In recent months, promoters of companies such as Adani Green Energy, Ester Industries and Jupiter Wagons, among others have converted warrants at premium valuations.
In the case of Adani Green Energy, promoter-group entities converted warrants into equity shares in July 2025. At the time of allotment in January 2024, promoters had paid Rs 370.19 per warrant, equivalent to 25% of the issue price. The remaining 75%, or Rs 1,110.56 per warrant, was paid in July 2025 at the time of conversion, according to stock exchange data. Notably, Adani Green Energy shares were trading at around Rs 1,000 during that period. The stock closed near Rs 1415.80 on May 14, 2026.
Likewise, in the latest case involving Ester Industries, promoters converted warrants on May 12 at Rs 158 per share, a premium of more than 60% over the prevailing market price of around Rs 98.
Further, the total amount received from the promoters and other investors is Rs 165.25 crores against the share warrant issue of Rs 175 crores. Meanwhile, consolidated profit after tax of the company jumped by over 300% year-on-year to Rs 8 crore for the quarter ended March 2026.
Similarly, promoter entity of Jupiter Wagons, Tatravagonka AS converted warrants into equity on December 19, 2025, at issue price of Rs 470, indicating a premium of more than 75%. Share of the company have jumped more than 8% till date after the regulatory filing in December 2025. On the other hand, the benchmark NSE Nifty index has declined nearly 10% during the same period.
According to brokerage Angel One, when promoters subscribe to warrants using their own capital, it signals confidence in the company’s future prospects and often improves sentiment among retail investors.
From an investor’s perspective, such transactions raise an immediate question: why would insiders deploy fresh capital at a price the market itself is unwilling to pay today? The answer typically lies in forward visibility.
Promoters generally have a clearer understanding of order books, margin trends, expansion plans and future earnings visibility. By converting warrants at a premium, they are effectively signalling that current market valuations may not fully reflect the company’s medium to long -term potential.
