TLDR:
- HNIs are turning to equity warrants for preferential issues in small companies.
- This trend is similar to the ‘spray-and-pray’ strategy of VC funds.
The article discusses how High Net-Worth Individuals (HNIs) are increasingly adopting a ‘spray-and-pray’ strategy similar to Venture Capital funds by investing in small companies through equity warrants. This trend has made HNIs the primary source of capital for many small companies. Equity warrants, a popular choice within preferential issues, have become a hit among HNIs due to the potential for high returns. The article emphasizes how HNIs are taking on more risk with these investments but see potential for significant gains. The author, Santosh Nair, delves into the implications of this strategy and its impact on the stock markets and small companies.
