Why are firms choosing SPACs over IPOs?
December 28, 2021 / 03:22 PM IST
Ed-tech firm Byju's may choose a SPAC or a special purpose acquisition company to go public, instead of a domestic listing. SPACs raise capital through an IPO and then scout for a company to acquire; the merger makes the latter a listed company by default. When the Indian IPO market is booming, why choose the SPAC way? For one, an IPO takes at least 15-18 months to complete, while SPAC margers can be wrapped up in 3-6 months. The deal price can also be established upfront, which is a relief in a volatile market. The company can also save on capital and effort, since it doesn't have to take out investor roadshows.