Creating regulatory eco-system for SPACs in India

– Ajay Kumar KV, Manager & Himanshu Dubey, Executive


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.


Introduction. 2

Important regulatory concerns. 3

  1. Sponsor’s contribution. 4
  2. Safekeeping of IPO proceeds. 4
  3. Acquisition Process. 4
  4. Managing conflict of interest 5
  5. Exit mechanism… 5
  6. Speculation on shares. 5
  7. Celebrity endorsements. 6

Regulatory framework in India. 6

Issues under the Act 6

Regulatory framework for SPACs as per the IFSCA (Issuance and Listing of Securities) Regulations, 2021. 9

Exploring some scenarios and the concomitant regulatory ramifications. 13

Regulatory framework on SPACs abroad. 16

  1. Malaysia. 16
  2. Canada. 18
  3. United Kingdom (UK). 19
  4. United States of America (USA). 21

Conclusion. 24

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