SEBI exploring framework for SPACs in India, says chairman Tyagi

MUMBAI: The Valuable Market Advisory Committee of Sebi is exploring whether or no longer the regulator must introduce a framework for particular cause acquisition companies or SPACs in India, chairman Ajay Tyagi talked about on the present time at a FICCI tournament.

“We have got few a kind of proposals in pipeline which might perhaps presumably be in the early discussion stage - IPO reforms on the e book constructing & mounted tag framework and provisions in relation to tag band and further reforms on preferential peril - being about a of them,” Tyagi talked about.

Tyagi talked about that the advisory committee is furthermore debating particular concerns in relation to SPACs and the safeguards that investors will need if the investment automobile became allowed in India.

SPACs bring together returned to prominence over the final twelve months, particularly in the US, as a technique to raise capital from investors with out going via the aged IPO route. Such devices are most frequently cherish clean cheque companies.

A SPAC acts cherish a shell company with the suitable cause of buying for one more company inner a stipulated period of time. In most cases institutional investors would elevate capital from investors with the aim of buying for a company inner two-three years. Within the tournament of acquisition, holders of the SPAC are supplied shares of the unusual merged entity or an exit.

In case the SPAC fails to own the corporate inner the stipulated time, the capital raised is returned to investors alongside with interest.

While the SPAC phenomenon ran hot in the US in 2020, the turn of the twelve months has no longer been kind to the market as several SPACs listed on the US market bring together collapsed dropping billions of bucks in notional price.

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