Global Law Assembly Technical Report Series
3 Regulatory Concerns of Special Purpose Acquisition Companies from the Indian Context Concerns under Securities Law Securities law in India is administered by the Securities and Exchange Board of India (SEBI) who is India’s securities market regulator. The first challenge which is faced by SPACs under Indian securities law is the eligibility conditions under the SEBI (Issue of Capital and Disclosure Requirements) (ICDR) Regulations, 2018 19. The eligibility criteria under Regulation 6 (1) of SEBI ICDR Regulations, 2018 for an IPO requires the company to; firstly, possess net tangible assets of at least three crore rupees for the preceding three years; secondly, have an average operating profit of at least fifteen crore rupees during the preceding three years; and thirdly, have a net worth of at least one crore rupees in each of the preceding three years. 20 Considering the fact that SPACs do not qualify the eligibility criteria laid down by the regulations, that is another impediment for development and functioning of SPACs. But under Regulation 6(2), there are alternative compliance norms if the said entity fails to conform to the criterion provided under subregulation (1). This in effect means that 75 percent of the net offer will have to be allocated to qualified institutional buyers through Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 <https://www.sebi.gov.in/legal/regulations/jan-2020/securities-andexchange-board-of-india-issue-of-capital-and-disclosure-requirementsregulations-2018-last-amended-on-january-01-2020-_41542.html> accessed 03 October 2021. 20 Shah D, ‘SPAC Listings in India: Regulatory Hurdles and the Way Forward’ (IndiaCorpLaw, 23 March 2021) <https://indiacorplaw.in/2021/03/spaclistings-in-india-regulatory-hurdles-and-the-way-forward.html> accessed 27 September 2021. 19
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