Comments
India's Gift City regulator IFSCA is now looking to facilitate the listing of Special Purpose Acquisition Companies (SPACs) – which have been all rage in the US in recent months – in the stock exchanges under its supervision, clearly indicating its keenness to promote innovative methods for raising of capital and make Gift City a globally competitive financial platform for global issuers.
A new consultation paper issued by IFSCA now seeks public comments on its proposal to enact an “all encompassing framework to facilitate issuers access global capital”.
The framework proposed by IFSCA provides for issuance and listing of securities by start-ups, small and medium enterprises and Special Purpose Acquisition Companies (SPAC).
Framework
Put simply, SPACs are shell companies that have no business or assets. They are designed to raise money through IPO and then the proceeds are used to merge with or acquire a private operating company. Globally, SPAC has become an important structure to raise capital through IPOs for acquiring companies or assets. More than $83 billion were invested in SPACs in 2020 in the US.
To keep with pace with the evolving market environment, IFSCA is now proposing a suitable framework for capital raising and listing of SPAC on the recognised stock exchanges in International Financial Services Centres (IFSCs).
The salient features of the IFSCA framework for listing of SPACs are as follows: Offer size of not less than $50 million or any other amount as may be specified by the Authority from time to time.
Further, the sponsor would have to hold at least 20 per cent of the post issue, paid-up capital. Also, the minimum application size in an initial public offer of SPAC shall be $250,000. A minimum subscription of at least 75 per cent of the offer size has been stipulated.
Meanwhile, considering the important role of capital markets in bridging the gap between investors and issuers of green bonds, social bonds, sustainable bonds and sustainability linked bonds , IFSCA aims to make IFSC at GIFT City a prominent international centre for sustainable finance. The proposed framework by IFSCA is expected to support the needs for Environment, Social and Governance financing, an official release said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.