Law Insider India

Legal News, Current Trends and Legal Insight | Supreme Court of India and High Courts

What is an IPO?

22 min read

By Arshia Jain

Published On: November 16, 2021 at 15:00 IST

Introduction

Due to the covid-19 outbreak, the Indian economy has experienced its biggest economic contraction in a year. To lessen the impact of the pandemic, the government ordered a nationwide lockdown in March 2021. The Indian economy thereafter entered a period of recession for the first time in nearly a quarter-century.

From 2021 to 2022[i], the Indian economy is predicted to grow at a historically high rate of 12.5%. In Q4 2020, the Initial Public Offering (IPO) market saw an uptick in activity, with 17 IPOs compared to only one IPO in Q1 2020.

Consumer services, pharmaceuticals, healthcare, hotels, airlines, food and beverages, entertainment, footwear, textiles, and insurance were among the companies that recently listed on Indian stock exchanges, as opposed to the previous trend of only companies in certain sectors, such as banking, finance, and information technology, considering an IPO.

In India, an Initial Public Offering (IPO) can consist of new issuance of securities, an offer for the sale of securities by current holders of stocks, or a combination of the two. Furthermore, an issuer may choose to list its securities on the Main Board, the SME Exchange, or the Innovators Growth Platform on the Indian stock exchanges.

The SME Exchange is a trading platform run by a recognized stock exchange with national terminals approved by the Securities and Exchange Board of India (SEBI) but without the Main Board. The Innovators Growth Platform is a trading platform for the listing and trading of selected securities issued by firms that meet SEBI’s qualifying criteria. Because issuers in India prefer to list on the Main Board, this chapter will be limited to equity share listings on the Main Board.

Stock Exchanges in India

BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE) are India’s two main stock exchanges (NSE). BSE was founded in 1875 and was Asia’s first stock exchange as well as the world’s quickest stock exchange, with a speed of six microseconds[ii]. BSE provides a trading platform for equities, currencies, debt instruments, derivatives, mutual funds, and small and medium-sized enterprise equities, as well as trading in equities of small and medium-sized organizations. Small and medium-sized enterprises (SMEs) with post-issue face value capital of less than or equal to 250 million rupees and post-issue paid-up capital of less than or equal to 100 million rupees are targeted by the SME platform.

The S&P SENSEX of the BSE is a market-weighted index that tracks the performance of the 30 largest, most liquid, and financially sound companies listed on the BSE[iii] across key sectors of the Indian economy. Since its inception in 1994, the NSE has grown to become India’s largest stock exchange and the world’s second-largest by the number of equity share trades from January to June 2018[iv]. The NSE offers a trading platform for stock and equity-linked products, including mutual funds and institutional placement programs, as well as derivatives and debt trading. NIFTY 50 is the NSE’s main index[v].

It keeps track of the stock performance of 50 firms from 12 different industries. Initial and continued listing requirements under the uniform listing agreement, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2018, as amended (the ICDR Regulations), for firms intending to list on Indian stock exchanges, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, as modified, are required (the Listing Regulations). In India, the concept of dual listing is not recognized by the regulatory environment. To allow for a dual listing, securities and company rules will need to be amended. A summary of the listing requirements:

Any issuer planning an IPO must meet specific independent requirements of the stock exchange on which it plans to list its equity shares, as well as the SEBI eligibility requirements outlined in the ICDR Regulations and Listing Regulations. In addition, the issuer must follow the Companies Act 2013, as amended (the Companies Act 2013), read in conjunction with its rules, the Securities Contract (Regulation) Act 1956 and India’s foreign investment regulations, as well as the Securities Contract (Regulation), Rules 1957, as amended from time to time.

The following is the minimum percentage of equity shares that the issuer must offer to the public in an IPO:

  • If the issuer’s post-IPO equity share capital is less than or equivalent to 16 billion rupees, at least 25% of each class of equity shares must be issued to the public;
  • If the issuer’s post-IPO equity share capital is more than 16 billion rupees but less than or equal to 40 billion rupees, a percentage of equity shares equivalent to 4 billion rupees must be issued to the public; and
  • If the issuer’s post-IPO equity share capital exceeds 40 billion rupees, at least 10% of each class of equity shares must be sold to the public.
  • Within three years of the date the securities are listed, companies that come under criteria (b) and (c) must grow their public shareholding to at least 25%.

Requirements for undertaking an IPO

To conduct an IPO, the issuer must meet specific SEBI conditions, which include the following:

  • It must have net tangible assets of at least 30 million rupees computed on a restated and consolidated basis in each of the preceding three full years (each of 12 months), with no more than 50% kept in monetary assets;
  • It must have had an average operating profit of at least 150 million rupees in each of the preceding three years (of 12 months each), calculated on a restated and consolidated basis;
  • In each of the previous three full years, it must have a restated and consolidated net worth of at least 10 million rupees (of 12 months each).
  • If it has changed its name within the prior year, it must have earned at least 50% of its income for the preceding full year from the activity indicated by the new name, measured on a restated and consolidated basis;
  • SEBI should not prevent the issuer, its promoters, promoter group, directors, or selling shareholders from accessing the capital markets; however, this restriction does not apply if the period of debarment has already expired at the time the draught offer document is filed;
  • The promoters or directors were not or are not also promoters or directors of any other company that is barred from accessing the capital market under any SEBI order or direction; however, the restriction does not apply if the period of debarment has already expired at the time the draught offer document is filed;
  • Following the Reserve Bank of India’s (RBI) guidelines on wilful defaulters, the issuer, its promoters, and directors should not be classified as wilful defaulters by any bank, financial institution, or consortium thereof;
  • The issuer’s existing partially paid equity shares have either been fully paid up or forfeited; and
  • Under the Fugitive Economic Offenders Act 2018, none of the issuer’s promoters or directors should be classified as fugitive economic offenders.

If the issuer does not meet the conditions in points (a) to (d), it may proceed with an IPO through the book-building process, in which at least 75% of the net offer to the public must be distributed to qualified institutional buyers, or the subscription money must be reimbursed and the IPO would fail. Furthermore, an issuer cannot conduct an IPO if there are any outstanding convertible instruments or other rights that would allow any person listing any option to obtain equity shares, according to the ICDR Regulations.

Statutory Lock-In

At least 20% of the promoters’ post-issue paid-up capital must be locked in for three years. From the date of allotment in the IPO, the promoters’ and all other shareholders’ remaining shareholdings are subject to a one-year lock-in term. This does not apply to equity shares:

  • Allotted to current and former employees under any stock option scheme before the IPO;
  • Held by or transferred to an employee stock option trust under the exercise of options by current and former employees; or
  • Held by a venture capital fund, alternative investment fund, or foreign venture capital investor.

Alternate investment funds, foreign venture capital investors, scheduled commercial banks, public financial institutions, or Insurance Regulatory and Development Authority of India-registered insurance companies may contribute to meet the shortfall in the minimum contribution as specified for the promoters if the post-issue shareholding is less than 20%, subject to a maximum of 10% of the issuer’s post-issue capital without being identified. If the issuer does not have any identifiable promoters, the 20% lock-in rule does not apply.

Rejection Criteria

Following the ICDR Regulations and the Securities and Exchange Board of India (Framework for Rejection of Draft Offer Documents) Order 2012, SEBI may reject the draught offer document on a variety of grounds, including:

  • No one knows who the ultimate promoters are;
  • The reason for the monies being raised is unclear;
  • The issuer’s business model is overstated, convoluted, or deceptive, and investors may be unable to analyse the risks associated with such business models;
  • There is an unexpected surge in business before the submission of the draught offer document, and the responses to the clarification requests are inadequate; or
  • Ongoing litigation that is so significant that the issuer’s survival is predicated on the outcome of the case.

Overview of Law and Regulations

The Securities and Exchange Board of India (SEBI) was founded in 1992 under the provisions of the Securities and Exchange Board of India Act 1992, as amended. SEBI is an independent organization tasked with safeguarding the interests of investors in securities, as well as promoting and regulating the securities market and related topics. The SEBI-issued ICDR Regulations contain extensive provisions controlling the IPO as well as detailed instructions on:

  • Requirements for disclosure;
  • The formats of the different due diligence certificates to be given by the IPO’s merchant bankers;
  • Qualifying criteria;
  • Public relations guidelines;
  • The procedure for conducting the IPO, including the issuance’s opening and close; and
  • Terms and conditions connected to initial public offerings (ipos).

The SEBI Listing Regulations, in addition to the ICDR Regulations, cover principles, common obligations, and continuous disclosure requirements for all firms that have already been listed on any of the country’s stock exchanges. The Listing Regulations also spell out all of the corporate governance requirements that must be met by a listed business.

When conducting an IPO, an entity must follow the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations 2015 (the Insider Trading Regulations) and the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011 (the Takeover Regulations), as amended from time to time. The Insider Trading Regulations, which were notified in January 2015, expanded the scope of insider trading regulations in India by making them applicable to organizations that are considering becoming public. No issuer may communicate, provide, or allow access to any unpublished price-sensitive information relating to a company whose securities are listed or proposed to be listed, or any person, including other insiders, unless it is for legitimate purposes, the performance of duties, or the discharge of legal obligations.

When investing in the issuer’s equity shares, an investor must make sure that the transaction does not fall under the Takeover Regulations. In addition, an entity must comply with, among other things, the disclosure obligations outlined in the Companies Act 2013, as well as the rules governing it. The company must also follow the RBI’s various circulars and guidelines on foreign investment that are released from time to time.

The transfer of shares between an Indian resident and a non-resident does not require prior approval from the relevant government authorities if the investee company’s activities fall under the automatic route under the foreign direct investment policy and do not fall under the provisions of the Takeover Regulations; the non-resident shareholding falls within the foreign direct investment policy’s sectoral limits, and the pricing is following the guidelines.

The Offering Process

An IPO in India usually takes seven to nine months, depending on the complexities of the transaction, such as the issuer’s restructuring, the preparation of pro forma financial statements if the issuer has recently acquired or divested businesses, compliance with the law, receipt of all necessary regulatory approvals, and other market conditions.

The following are the important players in the IPO process:

  • Merchant bankers: The issuer must designate at least one or more merchant bankers, at least one of whom must be the head merchant banker, as defined by the Securities and the Merchant Bankers Regulations of the Exchange Board of India (Merchant Bankers) Regulations of 1992. Merchant bankers are largely responsible to SEBI for assuring compliance with the IPO process’ disclosure requirements and other restrictions. Only a merchant banker can file the offer documents with SEBI on behalf of the issuer.
  • Legal counsel: The issuer’s Indian legal counsel conducts legal due diligence, provides advice on Indian legislation that applies to the issuer and the IPO, and participates in the preparation of the offer document’s non-business portions. In most transactions, merchant bankers employ a separate law firm to act as their Indian legal counsel. In larger transactions, foreign legal counsel performs legal due diligence, provides advice on international legal and regulatory concerns relevant to the offer, sale, and distribution of shares, and aids in the design of the business-related sections of the offer document.
  • Auditors: The financial accounts of the issuer are audited and restated by auditors for inclusion in the offer document. They also issue ‘comfort letters’ to merchant bankers at various phases of the IPO process, verifying and certifying the accuracy of the financial information presented in the offer document.
  • Registrar to the IPO: Accepting application forms from IPO investors, processing application forms, and coordinating the procedure for assignment of equity shares and refund of subscription funds where equity shares are not allotted to the investor are all responsibilities of the IPO registrar.
  • Designated intermediaries: Designated intermediaries are companies that have been permitted to collect application forms from investors who want to participate in the IPO. Merchant bankers, syndicate members, collecting depository participants, sub-syndicates or agents, self-certified syndicated banks (SCSBs), registrar and share agents, and registered brokers are all designated intermediaries.
  • Sponsor banks are bankers to an issue that has been registered with SEBI, and they were recently created to make the usage of a Unified Payments Interface easier (UPI) as a payment mechanism for bids submitted by retail individual investors (RIIs) via intermediaries. They are responsible for:
    • Initiating a mandate request (i.e., asking the riis to authorize the blocking of funds equal to their application amount);
    • Receiving the status of the block request from the rii and sharing it with the stock exchanges; and
    • Ensuring subsequent debit of funds to the issuer’s account in the event of allotment.
  • Advertising agency: An advertising firm is in charge of the IPO’s public relations efforts, as well as providing merchant bankers with the information they need to file a compliance certificate to SEBI.
  • Monitoring agency: If the IPO issue size (excluding the offer for sale by selling shareholders) exceeds 1 billion rupees, the ICDR Regulations require the issuer to ensure that the IPO proceeds are monitored by a public financial institution or one of the scheduled commercial banks named as the issuer’s banker in the offer document. The monitoring agency will be required to produce a quarterly report to the issuer in the format stipulated in the ICDR Regulations until at least 95% of the proceeds of the issue have been used (excluding amounts raised for general corporate purposes).
  • ASBA process: To make payments, you must use the Application Supported by Blocked Amount (ASBA) capability. The application money is blocked in the bank account specified in the application form until shortly before the allotment, or withdrawal or failure of the IPO, or withdrawal or rejection of the application, as the case may be, according to the ASBA method. If the bid is accepted, the funds are transferred from the bank account to the issuer’s public offer account.

SEBI has recommended the gradual abandonment of the existing process of physical movement of application forms from intermediaries to SCSBs for blocking of funds for applications by RIIs through intermediaries in order to decrease the time between issue closure and listing. Instead, RIIs must submit all applications to intermediaries through ASBA, with UPI as the payment method. UPI will allow the facility to block funds at the time of application for public issues.

Pitfalls and considerations

As previously stated, SEBI has the authority to reject a draught offer document if it has reasonable grounds to believe that, among other things, the ultimate promoters are unidentifiable, the purpose for which the funds are being raised is vague, or the issuer’s survival is dependent on the outcome of pending litigation.

As a result, before filing the draught offer document, the issuer must ensure that it does not trigger any rejection criteria, as issuers whose draught offer documents are rejected are barred from accessing capital markets for at least one year from the date of rejection, and the period may be extended depending on the materiality of the omission and commission. SEBI may also take legal action against the merchant bankers or the issuer, depending on the circumstances.

The issuer must provide detailed disclosures about the purpose for which the funds are being raised, including, among other things, the implementation schedule; deployment of funds; sourcing of financing for funds already deployed; details of all material existing; or anticipated transactions about the utilization of the issue proceeds or project cost with the issuer’s promoters, directors, key management personnel, associates, and group companies. Furthermore, the amount raised by the issuer through the issuing of specified securities cannot exceed 25% of the total amount raised by the issuer.

As a result, issuers are not permitted to build war chests and must disclose all relevant information in the offer document. In addition, an issuer is not entitled to deduct its expenditures from the amount raised through the IPO. In the event of a change in objects, the promoters or shareholders in control of an issuer must make an exit offer to dissenting shareholders by the Companies Act 2013 and the ICDR Regulations.

Because of the increased participation by financial and strategic investors in recent years, identifying promoters has grown more difficult. While certain financial and strategic investors own a majority of the issuer’s stock and have nomination directors on the board, these investors may not be considered promoters due to the nature of their investment and other factors such as lack of engagement in the issuer’s day-to-day operations.

The determination of promoters is subjective and must be handled on a case-by-case basis. For example, the issuer would have to determine whether:

  • Any entity has been identified as a promoter in any licenses, borrowings, material agreements such as shareholders’ agreements, regulatory or corporate filings;
  • Any entity controls management or policy decisions;
  • Any entity has the authority to control the issuer’s board of directors; or
  • Any entity has the authority to appoint the issuer’s majority of directors.

Once the issuer has identified the promoter, the offer document must include thorough information concerning the promoter. This covers legal processes involving the promoters, as well as the source of funds used to purchase the issuer’s securities.

If the promoter is an individual, further information such as the promoter’s date of birth, age, educational credentials, experience, previous roles held, and prior directorships must be disclosed. If the promoter is a corporation, information such as the promoter’s brief history, date of incorporation, changes in activities, current activities, names of natural persons in control of the promoter, and details of management changes must be provided.

When the issuer is undergoing an IPO, no one shareholder shall be given any special privileges, according to stock exchange regulations. As a result, any special rights granted to a permanent shareholder must expire at the time equity shares are listed on the appropriate stock exchanges. If the investor retains a significant shareholding after the issuer’s equity shares are listed, this leads to a fair amount of discussion with financial, private, or strategic investors who prefer to retain a seat on the issuer’s board of directors or certain policy, operational, and information covenants.

Until recently, if a selling shareholder had convertible securities and wanted to sell equity shares in the IPO, it had to convert all of the convertible securities into equity shares before submitting the DRHP. The time it takes to list equity shares on recognized stock exchanges is normally four to six months from the date the DRHP is filed. Due to the lack of clarity on the pricing and timing of the IPO for a long period of four to six months, converting securities before filing the DRHP exposes selling shareholders to significant risks.

The ICDR Regulations now allow selling shareholders to convert fully paid-up compulsorily convertible securities before the filing of the RHP (in the case of a book-built issue), as long as the selling shareholder adheres to the one-year holding period for the securities and provides full disclosures of the terms of conversion or exchange in the draught offer document. This adjustment was made to provide selling stockholders more control and visibility over the pricing and timing for the IPO’s completion.

Considerations for foreign issuers

The stock exchanges in India do not allow foreign issuers to list their equity shares. The issue of Indian depository receipts allows a foreign business to get access to the Indian capital markets (IDRs). IDRs are issued by a depository and are denominated in Indian rupees. A foreign issuer seeking to issue IDRs should be listed in its home country, not be barred from issuing securities by any regulatory body, and have a track record of adhering to securities market regulations in its home country. To present, only one IDR has been issued in India, namely by Standard Chartered PLC.

If a foreign firm’s Indian subsidiary wants to list its equity shares, the foreign entity will be designated as a promoter. If the immediate holding company is a shell that does not conduct any significant activity, the entity that has ultimate control over the Indian subsidiary must also be named as a promoter.

The overall ceiling limit for Foreign Portfolio Investors (FPIs) is the sectoral cap applicable to the issuer (as per the Consolidated FDI Policy Circular of 2020), and 10% of the issuer’s paid-up capital for non-resident Indians (NRIs) and overseas citizens of India (OCIs) on a repatriation basis. The upper limit for NRIs and OCIs can be increased to 24% with the consent of the issuer’s board of directors and shareholders. The RBI keeps a close eye on the ceiling restrictions daily and has a robust monitoring system in place to guarantee that FPIs, NRIs, and OCIs do not exceed the aggregate ceiling limit.

The Consolidated FDI Policy Circular of 2020 states that any investment, subscription, purchase, or sale of equity instruments by entities of a country that shares a land border with India, or where the beneficial owner of investment into India is located in or is a citizen of such a country, requires prior approval from the Indian government.

If a transfer of ownership of an existing or potential foreign direct investment in an enterprise in India results in beneficial ownership falling under the above-mentioned restriction or purview, the government must approve the following change in beneficial ownership.

Post-IPO requirements

Once a company is listed on a stock exchange, it must adhere to all of the criteria of the Listing Regulations. The Listing Regulations require the listed entity to make disclosures to the stock exchanges on which the entity’s securities are listed of any events and information that are material in the opinion of the board of directors of the entity; the entity’s shareholding pattern; and quarterly and annual stand-alone financial results within 45 days of the end of each quarter other than the last quarter.

Other SEBI requirements apply to all listed businesses, notably the Insider Trading Regulations, which govern the treatment of undisclosed price-sensitive information. According to the Regulations, every entity whose securities are listed on a stock exchange must develop and post on its official website:

  • A code of practices and procedures for fair disclosure of unpublished price-sensitive information, which it would follow to adhere to each of the Regulations’ principles, and
  • A code of conduct to regulate, monitor, and report trading by employees and other connected persons.

When a direct or indirect purchase of control exceeds the minimum thresholds set by the Takeover Regulations, the listed firm must also comply with the public offer requirements of those regulations.

National IPO’s

  • PayTM: Paytm, one of India’s largest digital payment companies will go public on November 8, 2021, with the IPO closing on November 10, 2021. This IPO will be India’s largest IPO to date, with a total valuation of Rs. 18,300 crores when it launches. It will also include an Rs. 10,000 crore offer for sale as well as Rs. 8300 crores in new equity shares. This IPO’s pricing range will be Rs. 2080 to Rs. 2150.
  • Nykaa: The beauty marketplace got off to a fantastic start as a public company, with an overwhelmingly positive reception to its initial public offering. Nykaa’s IPO received approximately $32.53 billion in bids, and the stock is scheduled to be listed on Indian stock exchanges in the following 10 days, as is customary after IPO bidding. Nykaa may be offered at a premium of INR 600–INR 650 to the IPO price band of INR 1,085–INR 1,125, according to grey market share pricing. On the day of the IPO, this would be a huge bonanza for investors.
  • Adani Wilmar: Adani Wilmar, a significant FMCG operator in India, filed its DRHP with SEBI on August 2, 2021, to float its IPO. The initial public offering will consist of a single issue of new equity shares with no secondary offering. The IPO is expected to garner Rs. 4,500 crores for the company. Adani Wilmar aims to become the country’s largest food manufacturer by the year 2027. It hopes to accomplish this by putting its stock on the open market.
  • MobiKwik: MobiKwik filed a DRHP on July 12, 2021, with hopes to raise Rs. 1900 crores through an IPO. Fresh share issuance of Rs. 1500 crores would be included in the offer. It would also include a promoter and select shareholder offer for sale for Rs. 400 crores. MobiKwik is one of India’s largest digital payment providers, having been founded in 2009. According to the company’s Annual Report 2020, it presently serves 3 million retailers and 120 million users across India.
  • Ixigo: Ixigo, one of India’s most popular travel booking applications, is planning to go public with an Rs. 1600 crore initial public offering. Existing investors such as Micromax and Elevation Capital are hoping to exit a portion of the company with this IPO, while MakeMyTrip has already done so. As part of its IPO, the company hopes to raise Rs. 750 crore through an initial fundraise and Rs. 850 crore through an offer for sale.
  • PolicyBazaar: PolicyBazaar is the seventh Indian start-up to announce preparations for an initial public offering (IPO) in 2021. The IPO for PolicyBazaar is projected to be about Rs. 6,500 crore in size, with a mix of OFS and new shares. Existing investors will be able to sell their shares immediately on exchanges, according to regulatory filings. PolicyBazaar is a significant online life and general insurance aggregator that was founded in 2008. To move forward with the company’s IPO, PolicyBazaar’s parent company, PB Fintech, turned itself into a public limited company.

International IPO’s

  • Stripe IPO: This payment processing behemoth situated in San Francisco has had a pretty successful run. In early 2021, the company raised $600 million in its most recent round of investment, valuing it at a staggering $95 billion. Stripe might become one of the biggest, if not the biggest, IPOs in history, because of rising e-commerce demand, which exploded during the epidemic and hasn’t subsided since. Stripe’s IPO isn’t set in stone, but when it occurs, it might be worth far over $100 billion.
  • Rivian Automotive IPO: Rivian, an Amazon-backed electric pickup truck firm, may go public later this fall, with a valuation of up to $80 billion. To put things in perspective, that’s somewhat more than Ford’s current market value (F). It’s easy to see why: Americans adore pickup trucks, and Rivian’s R1T is stylish. This type, which costs $70,000, is advertised as being capable of going anyplace. The current chip scarcity has caused a delay in production, but once Rivian is operational, Amazon plans to purchase 100,000 vehicles.
  • InstaCart IPO: The online grocery-delivery service was valued at $39 billion in a spring funding round; however, others speculate that it may be worth more than $50 billion. In any event, as demand for delivery groceries increased in 2020, InstaCart benefited from Americans staying at home longer than they wanted. With such a massive audience, InstaCart might be one of the year’s biggest IPOs (although it may opt for a direct listing).
  • DataBricks IPO: Big data has become a major obsession for businesses across the board. Databricks has established itself as a top provider of solutions for database management, AI implementation, and even amazing data visualization. The company claims to have over 5,000 clients in 19 countries and claims to be on the course to achieve $1 billion or more in sales in 2022, rising more than 75% year over year.
  • Discord IPO: Start-up of an online chat room Discord was in talks with Microsoft about a $10 billion acquisition, but the deal fell through. The company then raised an additional $600 million in September 2021, giving it a $17 billion valuation. Discord hasn’t publicly stated any plans to go public, but with its most recent investment round providing lots of cash, the firm might very well consider going public in early 2022. That’s because gamers (see Roblox below) have fallen in love with the app’s quick communication features, and gaming has never been more popular. It currently has 140 million monthly users, generating $130 million in income last year.

Top 10 IPO’s in India 2021

Company NameListing DateIssue Price (Rs)Current Price at BSE (Rs)Current Price at NSE (Rs)Gain (%)
Paras Defence And Space Technologies LimitedOct 01, 2021175788.7789.05350.69
Nureca LimitedFeb 25, 20214001597.351599.45299.34
MTAR Technologies LimitedMar 15, 20215751902.251901.65230.83
Laxmi Organic Industries LimitedMar 25, 2021130413.4413.35218
Barbeque Nation Hospitality LimitedApr 07, 20215001558.951559.5211.79
Stove Kraft LimitedFeb 05, 20213851072.051069.05178.45
Easy Trip Planners LimitedMar 19, 2021187503.7593.85169.36
Macrotech Developers LimitedApr 19, 20214861261.951253.6159.66
Tatva Chintan Pharma Chem LtdJul 29, 202110832718.852725.2151.05
G R Infraprojects LimitedJul 19, 20218372042.052048.8143.97

Top 10 IPO’s in International 2021

CompanyExchange/ MarketPriceShareIPO dateOffer Amount
Emerging Markets Horizon Corp.NASDAQ Global10.0025,000,00011/18/2021$287,500,000
KC. Holdco. LLCNYSE18.00-21.0025,775,43411/18/2021$622,476,729.00
Sweetgreen, Inc.NYSE23.00-25.0012,500,00011/18/2021$359,375,000
Braze, Inc.NASDAQ Global Select55.00-60.008,000,00011/17/2021$528,000,000.00
Iris Energy ltd.NASDAQ Global Select25.00-27.008,296,23111/17/2021$256,759,605.00
User Testing, Inc.NYSE15.00-17.0014,169,40711/17/2021$277,011,906.00
Integrated Rail & Resources Acquisition Corp.NYSE10.0020,000,00011/12/2021$200,000,000
Weave Communications, Inc.NYSE24.005,000,00011/11/2021$120,000,000
Winc , IncNYSE MKT13.001,692,30811/11/2021$22,000,004
VMG Consumer Acquisition Corp.NASDAQ Global10.0020,000,00011/11/2021
$200,000,000  
Vaxxinity, Inc.NASDAQ Global13.006,000,00011/11/2021
$78,000,000  
Tivic Health System, Inc.NASDAQ Capital5.003,000,00011/11/2021$15,000,000

Conclusion

A fresh issuance of securities, an offer for the sale of securities by present stockholders, or a combination of the two constitutes an Initial Public Offering (IPO) in India. Consumer services, pharmaceuticals, healthcare, hotels, airlines, food and beverages, entertainment, footwear, textiles, and insurance are among the companies that have recently gone public on Indian stock exchanges.

The Indian economy is predicted to grow at a historically high rate of 12.5 percent between 2021 and 2022. The Indian capital markets have seen unprecedented levels of activity in recent months. This is attributed mostly to increased market liquidity as a result of stimulus measures. The market is expected to stay active this year.

ABOUT THE AUTHOR

Arshia Jain is a second-year law student at SVKM’s NMIMS, School of Law in Navi Mumbai, Mumbai, India, pursuing a BBALLB. When it comes to work, she is a dedicated and hardworking individual. She believes in pursuing one’s dreams and remaining optimistic throughout life.

Edited by: Aashima Kakkar, Associate Editor, Law Insider

References


[i] International Monetary Fund country data: India.

[ii] BSE – Introduction, (Last Visited: 16 November 2021).

[iii] Asia Index Pvt Ltd, S&P BSE SENSEX, (Last Visited: 16 November 2021).

[iv] National Stock Exchange – About NSE, (Last Visited: 16 November 2021).

[v] National Stock Exchange – Indices, (Last Visited: 16 November 2021).