• Pulkit Nandan

SPAC (Special Purpose acquisition company) transactions have quickly risen in popularity around the globe in the recent decades. In this article, SPAC as a concept is discussed, analysed and studied. For starters, SPAC is a kind of company that is incorporated without any commercial operation in mind and does not have a lot going on, in terms of business activity rather, it aims to get listed on a stock exchange and raise capital through IPO (initial public offering). Once the funds have been collected through the IPO, the SPAC company, acquires or merges with an existing private company known as the target company. This leads to the target company, being absorbed into the SPAC and it becomes a public company, without having to go through the process of IPO. Investors or sponsors of a SPAC company range from private equity firms and high net worth individuals to retail investors. It would not be wrong to state that, SPACs are like dormant or shell companies, which are only there to acquire the target. Targets are generally, identified after a SPAC company has been incorporated. In addition to this, a SPAC company (depending on the Articles of Association) may also have to return the investment it has raised through the IPO, to its investors if in case, it fails to acquire the target company within a few years of getting listed. This article starts with discussion about the history and reasons of emergence of SPAC companies’ and then it analyses the viability of SPAC transactions as a way of getting listed for a private company. Then it goes over the differences and advantages of SPAC transactions over traditional IPOs. In addition to that, it also looks into working of a SPAC company and its structure. SPAC transactions also involves many stakeholders like sponsors, target company and the investors. This article also explains about the roles of all the stakeholders in a SPAC transaction. Towards the end of the article, SPAC transactions’ rise in India and the kind of legal framework, that is present for these SPAC transactions is brought to light. It is no doubt that, SPAC companies are on the rise and SPAC transactions have been taking off in popularity in the last few years across the globe, as a viable alternative to the traditional IPO. It would be really interesting to find out, about the long term impact on the financial market from SPAC transactions and how this concept is slowly, taking over in emereging markets like India. Like every business restructuring, there are also risks and challenges that are involved in SPAC transactions. The article analyses how these risks matter in a SPAC transaction. Last but not the least, it goes over some popular examples and cases of SPAC transactions both in India and abroad.

SPAC (Special purpose acquisition company), process & structure, SPAC transactions, sponsors, target company, legal framework

"SPAC TRANSACTION : AS AN ALTERNATIVE TO TRADTIONAL IPO", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.10, Issue 1, page no.a300-a310, January-2023, Available :http://www.jetir.org/papers/JETIR2301038.pdf

"SPAC TRANSACTION : AS AN ALTERNATIVE TO TRADTIONAL IPO", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.10, Issue 1, page no. ppa300-a310, January-2023, Available at : http://www.jetir.org/papers/JETIR2301038.pdf