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In the past two months, investment bankers and lawyers said they have advised more IPO-bound clients to opt for confidential filings with the Securities and Exchange Board of India (Sebi) than before.
Confidential filing allows companies to submit a draft red herring prospectus to the regulator without immediately disclosing business and financial details to the public.
“We are advising some of our clients to go for the confidential filing route as it lets promoters keep their plans intact without locking into a valuation band in a volatile environment,” said Samir Agarwal, director – Indcap Advisors, a Kolkata-based merchant banking firm.
In April, Rediff.com filed a confidential draft paper with Sebi. SNVA Traveltech Ltd, which operates online travel platform Travomint, also chose the confidential route for an IPO.
The biggest advantage of the confidential IPO filing route is that a company gets an 18-month window from Sebi’s final observations to launch the IPO, against a 12-month window in the public filing route.
“Given that there is a lot of business uncertainty arising from the West Asia crisis, this additional time is an important benefit for IPO bound companies,” said Pracheta Bhattacharya, partner, JSA Advocates & Solicitors. “Additionally, companies in niche sectors or the technology-led businesses do not want to reveal confidential performance metrics at the DRHP stage, with limited deal certainty. For them, it’s making perfect sense to go for the confidential route.” Lawyers and investment bankers said more companies in the pharma and healthcare space, fintech, retail brands, and new age firms may go for confidential filing in the months to come.
“Companies are increasingly turning to confidential IPO filings to safeguard competitive positioning, manage uncertainties around evolving business models and navigate regulatory complexities,” said Pratik Loonker, MD & head – ECM and co-head – Financial Sponsor Group, Axis Capital.
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https://economictimes.indiatimes.com/markets/ipos/fpos/more-companies-may-take-confidential-route-to-file-ipo-papers/articleshow/131213537.cms
