IPO Readiness / DRHP Advisory
Quick Answer
IPO Readiness / DRHP Advisory India is a comprehensive service that prepares your company for an initial public offering. We guide you through financial restructuring, corporate governance improvements, and drafting the Draft Red Herring Prospectus (DRHP) in compliance with SEBI regulations and the Companies Act, 2013.
IPO Readiness / DRHP Advisory — detailed explanation below
Governing Act — IPO Readiness / DRHP Advisory India
The primary legislation governing IPOs in India is the Companies Act, 2013, along with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The DRHP must comply with the disclosure requirements specified under Schedule VI of the Companies Act, 2013 and the ICDR Regulations. Our advisory ensures that your company meets all statutory requirements for a successful public offering.
Government Department & Website for IPO Readiness / DRHP Advisory India
The key regulatory bodies are the Securities and Exchange Board of India (SEBI) and the Ministry of Corporate Affairs (MCA). The DRHP is filed with SEBI through its portal at www.sebi.gov.in. Additionally, the company must file certain documents with the Registrar of Companies (ROC) via the MCA portal at www.mca.gov.in.
IPO Readiness / DRHP Advisory India Application Process
The process involves several stages:
- Pre-IPO Assessment: Review of financials, corporate structure, and governance.
- Financial Restructuring: Adjusting capital structure, resolving any accounting irregularities.
- Due Diligence: Legal, financial, and regulatory due diligence.
- DRHP Drafting: Preparation of the Draft Red Herring Prospectus with all required disclosures.
- Filing with SEBI: Submission of DRHP and other documents to SEBI for approval.
- SEBI Review & Comments: Responding to SEBI observations and making necessary amendments.
- Final Approval & Listing: After SEBI clearance, the company can proceed with the IPO and listing on stock exchanges.
Key Forms Required for IPO Readiness / DRHP Advisory India
Key forms include:
- Form SH-7 (for increase in authorized capital, if needed)
- Form MGT-14 (for board resolutions related to IPO)
- Form PAS-4 (for prospectus filing)
- SEBI DRHP template (as per ICDR Regulations)
- Due diligence reports from auditors and legal advisors
Eligibility Criteria for IPO Readiness / DRHP Advisory India
A company must meet the following criteria:
- Net Tangible Assets: At least ₹3 crore in each of the preceding 3 years.
- Track Record: Minimum 3 years of operating history.
- Profitability: At least ₹15 crore average pre-tax profit in the preceding 3 years.
- Net Worth: At least ₹1 crore in each of the preceding 3 years.
- No defaults on loans or debentures.
- Compliance with corporate governance norms as per SEBI LODR Regulations.
Timeline for IPO Readiness / DRHP Advisory India
The timeline for IPO readiness varies based on company preparedness. The process typically includes pre-IPO assessment (2-3 months), financial restructuring (1-2 months), due diligence (2-3 months), DRHP drafting (1-2 months), and SEBI review (3-4 months). However, no specific timeline can be guaranteed as it depends on regulatory responses and company-specific issues.
Fees for IPO Readiness / DRHP Advisory India
The fees for IPO advisory are not prescribed by statute and are negotiated between the company and the advisor. Government fees include SEBI filing fees based on the issue size. Below is an indicative table of SEBI filing fees:
| Issue Size (₹ Crore) | SEBI Filing Fee (₹) |
|---|---|
| Up to 10 | 1,00,000 |
| 10 – 100 | 2,00,000 |
| 100 – 500 | 5,00,000 |
| Above 500 | 10,00,000 |
Note: These are government fees only. Professional fees for advisory are separate and subject to negotiation.
Frequently Asked Questions
What is IPO Readiness / DRHP Advisory India?
IPO Readiness / DRHP Advisory India is a service that helps companies prepare for an initial public offering by ensuring compliance with SEBI and Companies Act requirements, including drafting the Draft Red Herring Prospectus (DRHP).
Who needs IPO Readiness / DRHP Advisory India?
Any company planning to go public in India needs IPO Readiness / DRHP Advisory India to navigate the complex regulatory framework and prepare the necessary documents for a successful IPO.
What is the role of Accounting & Finance in IPO Readiness / DRHP Advisory India?
Accounting & Finance is crucial in IPO Readiness / DRHP Advisory India as it involves financial restructuring, audit of financial statements, and ensuring compliance with accounting standards required for the DRHP.
How long does IPO Readiness / DRHP Advisory India take?
The duration varies, but typically the entire process from assessment to SEBI approval can take 6-12 months, depending on the company's preparedness and regulatory responses.
What are the key documents in IPO Readiness / DRHP Advisory India?
Key documents include the DRHP, due diligence reports, audited financial statements, board resolutions, and compliance certificates as per SEBI ICDR Regulations.
Can a company with losses avail IPO Readiness / DRHP Advisory India?
Yes, but the company must meet the eligibility criteria under SEBI ICDR Regulations, which include profitability requirements. Loss-making companies may need to explore alternative routes like the SME IPO platform.
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