Understanding The Emerging Landscape Of Spacs: An Indian Outlook

Maher Patel, B.Com. LL.B., Institute of Law, Nirma University, Ahmedabad

ABSTRACT

The Indian capital markets have experienced exponential growth in recent decades resulting in significant technical and regulatory changes. One of the key developments that have been witnessed by the capital markets globally is the resurgence of the Special Purpose Acquisition Company (SPAC). A SPAC is essentially a “blank cheque company”. In simple words, it is a sponsor-created which has no independent operations and such company gets publicly listed to raise capital for the purpose of acquiring a non-listed company having its independent operations. As a consequence of such process, the non-listed company enters the capital markets and becomes publicly-listed. Indian companies, by employing such a process, have embedded its traces in the foreign land like Renew Power (Operating Company) got listed on Nasdaq by merging with RMG Acquisition Corp. II (SPAC). No SPAC has been listed on Indian stock exchanges till date. Therefore, India is still in its rudimentary yet increasingly developing stage of having the requisite framework that would permit SPAC listing in India. In this regard, the introductory limb of this paper examines the meaning and concept of SPACs. Secondly, it discusses intricacies involved in the implementation of cross-border SPAC mergers and regulatory framework in India. Thirdly, it enumerates the provisions relating to SPACs in the Consultation Paper on Proposed International Financial Services Centres Authority (Issuance and Listing of Securities) Regulations, 2021.