IPO – Vinod Kothari Consultants

The basics of bringing an IPO

September 6, 2023/0 Comments/in Capital Markets, Corporate Laws, IPO, IPOs and listing /by mahakagarwal

Mahak Agarwal | corplaw@vinodkothari.com

The Indian IPO market is currently booming. The performance of the Indian markets is a testament to the growth potential that it has for investors as well as the issuers. The markets are at an all time high in almost all sectors hitting new peaks everyday, giving companies an opportunity to hit the ‘jackpot’ with their issues. A 2023 Report by EY^[1] on IPO trends in India bears witness to the impressive positive outlook for IPO activity in India. The India Stock Exchanges have ranked 1st in the world in terms of the number of IPOs during 2023 and in the times to come, a fresh and significant momentum is anticipated in the Indian IPO markets encompassing both, the Main Board and the SME Board.

Having discussed the above, companies looking to bring an IPO may often find themselves bogged down by several basic questions including the ‘what’ of everything. This article proposes to answer such questions and capture the basics of bringing an IPO.

Amendments in ICDR – Public issues | Preferential allotments

January 19, 2022/0 Comments/in Corporate Laws, IPO, IPOs and listing, SEBI /by Staff

corplaw@vinodkothari.com

Our write-ups:

SEBI approves amendments – Public issues | Preferential allotments | Appointment of shareholder-rejected directors – click here
A Regulatory Affair: Fair Value Discovery in Preferential Share Issues – click here
Other write-up on Corporate Law matters – click here

SEBI approves amendments – Public issues | Preferential allotments | Appointment of shareholder-rejected directors

December 29, 2021/0 Comments/in Corporate Laws, IPO, LODR, SEBI /by Staff

Amendments approved in various SEBI Regulations

– Team Corplaw | corplaw@vinodkothari.com

SEBI Press Release dated December 28, 2021 – click here

Our write-ups:

SEBI approves stricter norms for appointment of rejected candidates – click here
A Regulatory Affair: Fair Value Discovery in Preferential Share Issues – click here
Other write-up on Corporate Law matters – click here

FAQs on IPO Financing

November 24, 2021/4 Comments/in Financial Services, IPO, IPOs and listing, NBFCs, SEBI /by Staff

Ajay Kumar KV, Manager ( finserv@vinodkothari.com)

IPO Financing, as the name suggests, is providing finance for the purpose of subscribing to initial public offers done by companies. In case of IPO Financing, the exposure is based on the borrower, and the securities/ shares, if allotted, are taken as collateral for securing the obligations under the loan. The investor will realise the shares so allotted in the IPO and pay-off the loan taken from the Banks/NBFCs.

How does IPO Financing work?

IPO Financing is widely used by High Networth Individuals (HNIs) as a tool to leverage the funds available with an intent to make profits from the IPO allotment price and the price at the time of listing. Typically, the lender would provide a short-term loan to the borrower at a certain interest rate, till the shares are listed. The transaction forces the investor to sell the shares once listed. Out of the proceeds, the lender would retain the repayment of loan and payment of interest plus other charges, as may be levied; and the balance is taken home by the investor as profits. Hence, the idea is not to “invest” in an IPO and eventually earn investment rewards; rather, the intent usually is to “enter” and “exit” by booking possible gains in the shortest time span.

Recently, the RBI has released Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs (SBR) on October 22, 2021. While the SBR provides for broad contours of the revised framework, concrete regulations in the form of ‘Directions’ are awaited from RBI. SBR fixes a ceiling of Rs. 1 crore per borrower in case of IPO financing by any NBFC.

We have tried to figure out the probable questions arising out of the aforesaid proposal and respond to the same in the form of these FAQs. However, these are subject to final directions yet to be issued by RBI in this regard. We shall update this FAQ once there are clear directions in this regard. These FAQs shall be read accordingly.

Appraising post IPO governance requirements

September 7, 2021/0 Comments/in Corporate Laws, IPO, LODR, SEBI /by Staff

Appraising post IPO governance requirements

Other ‘I am the best’ presentations can be viewed here

Our other relevant resources –

Creating regulatory eco-system for SPACs in India

August 18, 2021/0 Comments/in Corporate Laws, IPO, IPOs and listing, Restructuring /by Staff

– Ajay Kumar KV, Manager & Himanshu Dubey, Executive

[corplaw@vinodothari.com]

From a little-known word and a preserve of a select few finance professionals, the term Special Purpose Acquisition Companies (SPACs) is today a buzzword. The regulators across the globe are taking necessary actions to enable SPACs to raise money from investors – jurisdictions like the US, UK and Malaysia lead from the front. Having a sound regulatory framework is important because if investors are keen towards SPACs, and the regulators do not enable it, it is quite likely that the country will not be a friendly destination for SPACs. Hence, India’s securities regulator SEBI has recently constituted an Expert Group for examining the feasibility of SPACs in India, and the International Financial Services Center Authority (IFSCA) has issued IFSCA (Issuance and Listing of Securities) Regulations, 2021^[1] which provides a regulatory framework for listing of SPACs within its jurisdiction.

In this write up, the authors take a look at the global legislative measures, and also outline the various changes in the regulations that may be needed in India to enable to make India a SPAC-friendly jurisdiction.

Contents

Introduction. 2

Important regulatory concerns. 3