IPOs on the Rise: Yash Ashar Explains the Role of Capital Markets Lawyers
Yash Ashar, a senior partner at Cyril Amarchand Mangaldas, discusses the surge in Indian IPOs and the critical role played by lawyers in the listing process.
IposCapital MarketsYash AsharLegal Due DiligenceRegulatory ComplianceReal Estate NewsFeb 26, 2025
According to the survey, India led global IPO activity in 2024, contributing 30% of global listings, up from 17% in 2023.
The number of IPOs during April to December 2024 increased to 259, compared to 196 in the corresponding period of the previous year.
The amount raised almost tripled from ₹53,023 crore to ₹1,53,987 crore in the same period.
In 2024, for the first time, India rose to the number one position globally in IPO volume, listing almost twice as many IPOs as the US and more than two-and-a-half times as many as Europe.
The country’s capital market saw many major IPOs in 2024, ranging from budding companies like Swiggy and Ola Electric to giants like Hyundai Motors, which is India’s largest public issue ever, with a value of ₹27,856 crore.
Lawyers play a significant role in getting a company listed on the markets.
From pre-IPO due diligence to post-IPO support, lawyers act as a one-stop solution for all the legal and regulatory hurdles a company faces in the process of getting itself listed.
Yash J.
Ashar, Senior Partner at Cyril Amarchand Mangaldas (CAM), is a veteran in capital markets.
With over two decades of expertise in Indian securities law, he has played a pivotal role in major capital markets transactions.
His experience spans initial public offerings (IPOs), qualified institutional placements (QIPs), follow-on public offerings (FPOs), and various other instruments like ADRs, GDRs, and FCCBs.
Ashar is also recognized for his contributions to India’s growing market for Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs), having advised on several high-profile setups.
In this enlightening conversation with Bar & Bench, Ashar discusses the role of lawyers in an IPO, the due diligence process they undertake, and the legal support they provide to a company after the IPO.
Lawyers are responsible for advising the company and its Board of Directors on matters relating to the IPO.
This includes preparing the offer document, ensuring compliance with regulatory prescriptions, and negotiating agreements.
Legal due diligence for an IPO is an intense and detail-oriented exercise.
It involves reviewing corporate records, business contracts, shareholder arrangements, regulatory filings, and litigation involving the company.
Q&A sessions with senior management and intermediaries like statutory auditors and industry experts are also part of the process.
The preparation of the Draft Red Herring Prospectus (DRHP) is a critical step.
Lawyers prepare a draft of the offer document based on diligence and information provided, ensuring that regulatory prescriptions on disclosure are met.
The preparation of the DRHP is an iterative process, involving several rounds of discussions and drafts by the counsel.
Post-IPO, lawyers provide ongoing legal support, advising on compliance with listing regulations, insider trading norms, and other matters.
They help ensure the company meets the minimum public shareholding norms in the coming years.
Navigating potential legal risks associated with the IPO involves identifying existing concerns and flagging potential risks.
In certain cases, the company may need to file for compounding or other actions to correct past delays and problems.
Over the past two decades, the Securities and Exchange Board of India (SEBI) and the stock exchanges have evolved into institutions that are on par with the finest in the world.
The regulatory environment has become more rule-based, and the number of regulatory requirements and knowledge that must be considered in every transaction has increased.
Indian and global investment banks have also grown and recognized the potential of India, making it a fantastic period for capital market lawyers.
Remuneration for law firms working on IPOs is typically structured on a lump sum model with well-identified milestones.
Some sectors, such as real estate and infrastructure, require more work and may result in higher fees.
Working with new-age technology companies is also interesting due to their flat structure and involved decision-making processes.
Yash Ashar's insights provide a comprehensive look at the evolving landscape of capital markets and the crucial role lawyers play in ensuring successful IPOs.
With the increasing complexity and regulatory demands, the expertise of skilled lawyers like Ashar is more important than ever.
Frequently Asked Questions
What is the primary role of lawyers in the IPO process?
Lawyers play a key role in the IPO process by advising the company and its Board of Directors, preparing the offer document, ensuring regulatory compliance, and negotiating agreements with underwriters.
What does legal due diligence for an IPO involve?
Legal due diligence for an IPO involves reviewing corporate records, business contracts, shareholder arrangements, regulatory filings, and litigation. It also includes Q&A sessions with senior management and intermediaries.
How do lawyers assist in the preparation of the Draft Red Herring Prospectus (DRHP)?
Lawyers prepare a draft of the offer document based on due diligence and information provided, ensuring that regulatory prescriptions on disclosure are met. The preparation of the DRHP is an iterative process involving multiple rounds of discussions and drafts.
What ongoing legal support do lawyers provide after the IPO is completed?
Post-IPO, lawyers advise on compliance with listing regulations, insider trading norms, and other matters. They help ensure the company meets the minimum public shareholding norms in the coming years.
How is the remuneration structured for law firms working on IPOs?
Remuneration for law firms working on IPOs is typically structured on a lump sum model with well-identified milestones. Fees can vary based on the complexity and requirements of the sector.
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