Tera Software warrants could lift promoter holding to 49.61%

Tera Software Limited has proposed issuing up to 514,491 promoter-group warrants worth up to Rs 15 crore, a transaction that would raise promoter holding from 47.53% to 49.61% after full conversion. The board approved the preferential issue on November 11, 2026 at Rs 291.55 per fully convertible warrant, subject to shareholder approval.

What has Tera Software proposed to issue?

Tera Software has proposed a preferential private-placement issue of up to 514,491 fully convertible warrants at Rs 291.55 per security, aggregating up to Rs 15 crore. Its board approved the proposal on November 11, 2026, while setting the same date as the relevant date for determining the warrant price under the Securities and Exchange Board of India, or SEBI, Issue of Capital and Disclosure Requirements regulations.

Each warrant is convertible into one equity share, so conversion of the full proposed issue would result in up to 514,491 new equity shares. The filing describes the securities as fully convertible warrants, not immediate share allotments, which means the stated ownership changes apply after their conversion rather than at the board-meeting stage.

The issue requires members' approval at an Extra-Ordinary General Meeting, or EGM, for financial year 2026-27. Tera Software has approved convening its first EGM of that financial year to consider the preferential issue, as well as proposals to change its name and alter the objects clause of its Memorandum of Association, or MOA.

Who will receive Tera Software's proposed warrants?

Tera Software proposes to allot 257,246 warrants to Mr. T. Madhu Mitra, a whole-time director and promoter-group member, and 257,245 warrants to Mrs. T. Pavana Devi, a promoter-group member. The two allotments together account for all 514,491 warrants in the proposed issue.

Mr. Mitra held 841,308 shares, or 6.72%, before the proposed issue. Following conversion of 257,246 warrants, his holding would increase to 1,098,554 shares, representing 8.43% of the post-conversion equity capital disclosed by Tera Software.

Mrs. Devi held 574,760 shares, equal to 4.59%, before the proposed transaction. Conversion of her 257,245 warrants would take her holding to 832,005 shares, or 6.39%, based on the post-conversion ownership pattern in the filing.

How would Tera Software's ownership structure change?

Tera Software says promoter holding would rise by 2.08 percentage points, from 47.53% before the proposed transaction to 49.61% after full warrant conversion. That increase reflects the issue of 514,491 equity shares to the two promoter-group allottees if all their warrants are converted.

Public holding would decline by the same 2.08 percentage points, from 52.47% to 50.39%, according to the disclosed post-allotment pattern. The change results from the enlarged share capital after conversion, rather than from a transfer of existing public shares to the promoter group.

The filing states that the transaction would not trigger an open offer under SEBI's Substantial Acquisition of Shares and Takeovers Regulations, 2011. Tera Software records the open-offer outcome as “No” despite the promoter group's projected post-conversion holding of 49.61%.

Tera Software does not provide a holder-by-holder break-up of the remainder of the 47.53% pre-issue promoter stake. The announcement identifies the two allottees' combined pre-issue shareholding as 11.31%, based on Mr. Mitra's 6.72% and Mrs. Devi's 4.59% stakes.

When can Tera Software warrants be converted?

Tera Software's warrants can be converted into an equal number of equity shares within 18 months from their allotment date. Therefore, each of the 514,491 proposed warrants may become one share during that period, if shareholders approve the issue and the warrants are allotted.

The company says an unconverted warrant will lapse after the 18-month tenure. The filing does not specify a separate exercise schedule, instalment schedule or conversion date, and it does not state the EGM date in the supplied announcement.

The Rs 291.55 price is listed as the issue or allotted price for each security. At that price, the proposed 514,491 warrants have an aggregate stated value of up to Rs 15 crore, while the November 11, 2026 relevant date was used for pricing under the applicable SEBI regulations.

The projected 49.61% promoter stake is therefore conditional on full conversion within the stated 18-month period. If warrants are not converted in time, Tera Software says their tenure will lapse, so the disclosed post-conversion ownership pattern would not arise from those unconverted instruments.

What else did Tera Software's board approve on November 11?

Tera Software's board approved unaudited standalone and consolidated financial results for the quarter and half-year ended September 30, 2026. The November 11, 2026 announcement says those results were accompanied by the statutory auditors' limited review report, but the supplied filing does not provide revenue, profit or cash-flow figures.

The board also appointed Mr. G. Venkatanarayana as chief financial officer and key managerial personnel with effect from December 4, 2026. The appointment follows the vacancy caused by the resignation of Mr. G. Anilkumar, and Tera Software describes Mr. Venkatanarayana as a chartered accountant with more than 14 years of experience in corporate finance, tax audits and statutory compliance.

Tera Software additionally approved proposals to change its name and amend the MOA's objects clause to align with new business directions. Both actions require members' approval at the EGM, but the November 11 disclosure does not state the proposed new name or describe the intended business directions.

Conclusion

Tera Software's proposed warrant issue would provide up to Rs 15 crore through 514,491 instruments priced at Rs 291.55 each, while increasing the disclosed promoter holding by 2.08 percentage points to 49.61% after full conversion. The proposed allocation is split almost equally between Mr. Mitra and Mrs. Devi, and the company has stated that no open offer would result.

The next disclosed event is the EGM for financial year 2026-27, where members will consider the warrant issue, the proposed name change and the MOA amendment. If approved and allotted, the warrants must be converted within 18 months of allotment for the stated 49.61% promoter ownership outcome to be achieved; otherwise, unconverted warrants will lapse.