Statutory & Regulatory Amendments In India To Make SPAC Effective

The concept of Special Purpose Acquisition Companies (SPACs) was introduced to promote innovative methods for raising capital. SPACs have existed for decades and have descended from mere 'blank-check corporations' to being one of the hottest trends at Wall Street. The New York Stock Exchange (NYSE) launched its first SPAC in May 2017 and subsequently, SPAC transactions have escalated drastically with the U.S SPACs raising more than a record USD 83.4 billion in the initial three months of 2021.

SPACs are referred to as 'blank check' entities because they go public for fundraising and listing even before the acquisition target is identified. They are essentially shell companies, having no underlying business except for the sole purpose of raising public funds through an IPO and thereafter acquiring an unidentified target company out of these funds, within a stipulated timeframe.