The year 2020 saw stellar performances by capital markets across the world. One of the most interesting stories in the financial market was the resurrection of the ‘Special Purpose Acquisition Vehicles (SPACs)’. In the mercurial world of equity capital markets, nothing is more captivating than the thought of a quick and (relatively painless) fund-raising. Yet, IPOs remain the predominant method of fund-raising from the public.
In a traditional IPO, the target company is subjected to a time-consuming process involving roadshows, pitch meetings, and intense scrutiny of the company’s financial statements and other regulatory mandatory disclosures. This process is simplified in a SPAC where the funds are first deposited in the kitty, without even identifying the target. This makes SPACs a particularly attractive option for start-ups and technology companies, which prefer a privately negotiated deal over price-discovery in a traditional IPO process.
Please click here to read the full article by Sidharrth Shankar and Madhurima Mukherjee, published in Financial Express.
Madhurima Mukherjee is a Partner at JSA and Head of the Capital Markets practice, with over 20 years of experience advising on India's most significant domestic and international securities offerings. Recognised as one of India's leading capital markets lawyers, she has advised on landmark IPOs, QIPs, rights issues, REITs, InVITs, block trades and strategic capital-raising transactions for top corporates, financial institutions, investors and government entities.