Besides, investors opting for conversion are also entitled to the 1000 per cent or Rs 100 per share special dividend on the converted shares. This means the actual cost of acquisition will be much less if an investor goes in for conversion of the warrants.

According to company officials, the special dividend is for the fiscal year beginning May 1, 1998, and hence, the converted shares are eligible for the special dividend on a pro-rata basis. If a warrantholder opts for conversion on May 30 (the first day of subscription), he will be entitled to a dividend of around Rs 92 per converted share. As the warrant conversion price is Rs 101.80, the warrantholder, in effect, will pay only Rs 9.8 for a share of Max India, which is currently quoting at Rs 307.50.

Although the Max India scrip isexpected to dip, the conversion economics makes a lot of sense. No wonder, Max India officials are upbeat on the conversion. Says a senior company official, "We expect almost everyone to opt for conversion."

While the warrantholders will laugh their way to the banks, Max India, too, stands to gain. The company can hope to net around Rs 16.76 crore in case of 100 per cent conversion.

The conversion price has been determined by taking the average of the past three months' high/low price on BSE and then discounting it by 33 per cent. It is here that Max India shareholders have benefitted as the scrip has zoomed by over 440 per cent over the past three months. Prior to that, the scrip had been on a southward journey since mid-June 1997. In early February, the scrip touched an all-time low of Rs 56.50 and then rebounded to touch a new 52-week high of Rs 325.