30 hours Online Course on Securities Laws for Newly Listed and To-be Listed Companies

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Our Related Resources:

  1. LODR Resource Centre
  2. Prohibition of Insider Trading – Resource Centre
  3. Saaraansh (YT series)
  4. Making Corporate Governance IPO-ready
  5. The basics of bringing an IPO
  6. FAQs on IPO Financing
  7. Appraising post IPO governance requirements (YT video)

Making life easy for listed entities: SEBI proposes action on Expert Committee recommendations

– Team Corplaw (corplaw@vinodkothari.com)

Last updated on October 02, 2024

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SEBI approves uniform approach for market rumour verification, eases on-going compliance requirement for listed companies, eases norms for IPO/ fund raising, AIFs, relaxes requirement for FPI & extends timeline for HVDLE on March 15, 2024

-Avinash Shetty and Manisha Ghosh | corplaw@vinodkothari.com

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Other related resources:

  1. LODR Resource Centre
  2. AIFs ail SEBI: Cannot be used for regulatory breach
  3. FPIs – Synoptic Overview
  4. FPIs with single corporate group concentration to disclose beneficial ownership

The basics of bringing an IPO

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.

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SEBI approves changes in SSE framework – Eases registration & listing of NPOs

– Payal Agarwal, Senior Manager | corplaw@vinodkothari.com

(Updated as on November 28, 2023)

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Deferred public disclosure of RHP in IPO/filing of pre DRHP in confidential mode

– Anushka Vohra, Manager | corplaw@vinodkothari.com

SEBI vide its notification dated November 21, 2022 has come up with SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2022 (“Amendment”), effective immediately, making changes in the existing SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR”) w.r.t. Initial Public Offer (“IPO”). The Amendment has introduced an alternate method for filing the draft IPO document, known as draft Red Herring Prospectus (DRHP).

Pursuant to this alternate method, the issuer will have the option to keep the information-rich DRHP confidential from the public at large until the issuer is sure to proceed with IPO i.e after receiving observation from SEBI on the draft RHP (“DRHP”) filed. Until such time, the issuer can interact with the QIBs only to gauge the market. Any kind of marketing of IPO apart from interacting with the QIBs is prohibited during this period.

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Amendments in ICDR – Public issues | Preferential allotments

corplaw@vinodkothari.com

Our write-ups:

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

FAQs on IPO Financing

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.

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A layered approach to NBFC Regulation:

A summary of the regulations can be viewed here. Our Youtube elaborating on the subject can be viewed here.

 

Special Purpose Acquisition Company

Special Purpose Acquisition Company

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

Our other resources on related topics –

  1. https://vinodkothari.com/wp-content/uploads/2021/03/An-overview-of-SPACs-and-related-concerns-in-India.pdf
  2. https://vinodkothari.com/2021/08/spacs-value-proposition-regulatory-framework/
  3. https://vinodkothari.com/2021/08/regulatory-eco-system-for-spacs/