Indranil Banerjee & Kinkini Chaudhuri, Amity University, Kolkata
ABSTRACT
A corporation established specifically for the purpose of obtaining investment capital through an IPO is known as a Special Purpose Acquisition Company (SPAC) (IPO). With such a business model, investors can put money into a fund that will be used to buy one or more unnamed enterprises that will be revealed following the initial public offering (IPO). As a result, in the media, this kind of shell firm structure is frequently referred to as a "blank-check company. The money that the SPAC needs to raise through an IPO is kept in a trust until the stipulated time period has passed or the intended acquisition has been made. As a result, a SPAC doesn't operate, sell anything, and often simply keeps the funds received from its own IPO. The SPAC is required to reimburse the investors for their money in the event that the anticipated acquisition is not completed or legal procedures are still in progress. In actuality, a SPAC's "special purpose" is to introduce an exhilarating private company to the public investment market. SPAC tactics can be challenging, but they often go more quickly and are less expensive than standard IPO launches. When using a SPAC to go public, the advisory costs are frequently much lower than when using a conventional IPO. Early-stage businesses can successfully complete an IPO more easily than they can comply with the requirements to merge with a SPAC.
Keywords: Special purpose, IPO, Special Purpose Acquisition Company, investors, acquisition.
