India's first US listing through Special Purpose Acquisition Company or SPAC is here as ReNew Power raises over a $1 billion in the US market.
What is SPAC listing?
SPAC listing is the most talked about shortcut to global listing. SPAC -- popularly known as 'Blank Check' -- are shell corporations designed to take companies public without taking the IPO route.
How does the SPAC listing work?
There is a listed SPAC which targets and acquires an operational company and then it comes up to a listed successor company. This is what the Indian companies are eyeing.
SPAC listing and the Indian structure
Indian companies are gearing up through a structure of de-SPACing which means reverse merger into a listed SPAC. For this, a company needs to externalise or create an offshore entity.
However, the biggest issue Indian companies are facing -- apart from regulatory concerns -- is the transfer of shares to the externalised entity which under Indian law is taxable.
Benefits of SPAC listing
There are several benefits -- access to capital, better valuation, global visibility, short process and less compliance.To know more, watch the video.