"Sri Adhikari Brothers Television Network has been performing well and since the promoters' equity holding is 40 per cent, the company may be vulnerable to hostile takeover attempts," said a company official.

The core promoters -- Gautam Adhikari and Markand Adhikari -- will be raising their equity holding through an issue of around 25 lakh warrants on a preferential basis. Each warrant will entitle the promoters to one equity share of Rs 10 each. The conversion terms of the warrants and the price will be decided by the company at its board meeting on April 29.

According to a company official, the conversion price will be determined on the basis of SEBI guidelines. The SEBI guidelines require that the conversion price in a preferential issue be determined on the basis of the six-monthly average marketprice before the date of conversion or the average market price for two weeks before the conversion date, whichever is lower. "Although the board has to take a final decision on the conversion date, the company may convert the warrants before the end of 18 months," said the official.

Sri Adhikari Brothers' shares have seen a sharp rise in their price during the past couple of months on the Bombay Stock Exchange. During the last week, when the scrip touched a new 52-week high of Rs 35, the counter saw a sharp rise in volumes as well. From a low of Rs 17 on February 27, the scrip doubled to Rs 35 on April 21. However, after this rally the scrip shed some of its gains and slipped to Rs 29 on April 27. On April 16 and April 17, 41,000 and 31,600 shares were traded at Rs 28 and Rs 29, respectively.

On April 22, the volumes shot up further to 58,700 shares. The company has a floating stock of 30 lakh shares in the market and after the warrant conversion, the floating stock will come down to 40 per cent of thetotal equity. Post-conversion, the paid-up capital will swell from Rs 5 crore to Rs 7.5 crore.

Sri Adhikari Brothers, which is mainly into the production of television serials, is planning to go in for expansion. The company is planning to make regional-language programmes. It has already started making programmes for some of the South India-based channels.

The company is into the production of television software. In 1996, it came out with a maiden at par public issue of Rs 2 crore. Soon after its listing in 1996, the scrip touched an all-time high of Rs 42. The company has become the leading television software producer in the country. Several of its entertainment serials like `Shrimaan-Shrimati', `Commander', `Maarshall', `Philips Top 10' and `Teri Bhi Chup Meri Bhi Chup' have become quite popular.

The company has reported an impressive performance in the first six months of fiscal 1997-98. Although sales rose by only 10 per cent, net profit saw a jump of a whopping 102 per cent.