How Can a Startup Company Go Public? A Comprehensive Guide

Abhilasha Sharma
Feb 13, 2024
2 min read

Taking a startup company public in India involves a well-planned and regulated process. Here is a comprehensive guide on how a startup company can go public in India:

1. Evaluate Readiness:

Ensure that the startup is financially stable, has a proven business model, and has achieved a level of maturity that makes it suitable for public investment.

2. Engage Advisors:

Hire professionals such as investment bankers, legal counsel, and auditors with experience in Indian capital markets and IPOs. They play a critical role in guiding the company through the complexities of the IPO process.

3. Due Diligence:

Conduct thorough due diligence to identify and address any legal, financial, or operational issues that may impact the IPO process. This includes reviewing financial statements, contracts, and compliance with Indian regulatory requirements.

4. Financial Preparation:

Ensure that financial statements are prepared in accordance with Indian accounting standards and are audited by a recognized auditing firm. The financials should provide a clear and accurate picture of the startup's financial health.

5. Create an IPO Team:

Form a dedicated team within the company to manage the IPO process, including representatives from legal, finance, and communication functions.

6. Select Underwriters:

Choose investment banks or financial institutions to act as lead managers or underwriters for the IPO. They assist in determining the offering price, marketing the issue, and ensuring regulatory compliance.

7. File DRHP with SEBI:

Prepare and file the Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The DRHP contains comprehensive details about the company, its operations, financials, and the proposed terms of the IPO.

8. SEBI Review:

SEBI reviews the DRHP for compliance with regulatory requirements. The startup may need to respond to SEBI's comments and make necessary amendments to the prospectus.

9. Roadshow:

Conduct a roadshow to market the IPO to potential investors. This involves presentations by company executives to institutional investors, analysts, and other stakeholders.

10. Pricing and Allotment:11. Underwriting Agreement:

12. Listing on Stock Exchange:



13. Post-IPO Compliance:
14. Communicate with Stakeholders:
Considerations:
IPO regulations in India are governed by SEBI, and compliance with Indian securities laws is crucial.
Engage with legal, financial, and communication professionals early in the process.
Indian IPO timelines can be affected by market conditions, regulatory reviews, and other factors.
Going public in India requires thorough planning and compliance with local regulations. Staying informed about changes in the regulatory landscape and market conditions is essential. Seeking advice from professionals experienced in Indian capital markets can significantly contribute to the success of the IPO process.