IPO Advisory Services

No. The Book Running Lead Manager (BRLM) role — leading the issue, managing the offer document process end-to-end, and taking statutory responsibility for the offer document under SEBI ICDR Regulations — is performed by a SEBI-registered Merchant Banker, which PNPC is not licensed to be. Our role is the financial and governance readiness workstream: Ind AS restatement, internal financial controls, related-party transaction cleanup, and coordinating the financial sections of the DRHP with the BRLM's team. Most successful IPOs need both roles working in close coordination.

For a Main Board IPO starting from a private company that has never reported under Ind AS and has an underdeveloped governance framework, 18–24 months is a realistic range. Companies that already report under Ind AS with reasonably mature governance can move faster — sometimes 9–15 months. SME IPOs are typically shorter, in the 6–12 month range, given simplified disclosure requirements. The single biggest variable is the Ind AS restatement and internal financial controls build-out — not the SEBI filing process itself.

The Draft Red Herring Prospectus is the primary disclosure document filed with SEBI and made public simultaneously. It contains three years of restated financial statements, management discussion and analysis, complete related-party transaction history, litigation disclosures, risk factors, capital structure history, and the basis for the offer. It is scrutinised by SEBI, analysed by institutional investors, and forms the legal basis on which retail investors decide to subscribe. Every material fact must be accurate — misstatement or material omission can expose the company and its officers to regulatory action and civil liability.

Under Regulation 6 of the SEBI ICDR Regulations 2018, the standard route requires net tangible assets of at least ₹3 crore in each of the preceding three full years (with not more than 50% held in monetary assets, subject to certain exceptions), average operating profit of at least ₹15 crore in three of the preceding five years, and a net worth of at least ₹1 crore in each of the preceding three full years. Companies not meeting these thresholds may still access the Main Board through the alternative QIB book-building route, which requires at least 75% allocation to Qualified Institutional Buyers instead.

The SME IPO platform — NSE Emerge and BSE SME — is designed for smaller, high-growth companies that do not yet meet Main Board profitability and net-worth thresholds. It has a materially simplified eligibility test, lighter disclosure requirements relative to the Main Board, but mandates a market-making arrangement post-listing to support share liquidity. It is a genuine and increasingly well-used route to public capital for companies with strong growth trajectories but a shorter profitable operating history.

Restatement is not a reformatting exercise — it requires re-examining revenue recognition under Ind AS 115, lease accounting under Ind AS 116, financial instrument classification under Ind AS 109, employee benefit actuarial valuation under Ind AS 19, and consolidation of every subsidiary, associate, and joint venture, across three full financial years. Where the company's existing accounting has been inconsistent or where group-entity transactions were not properly documented, this uncovers issues that need resolution before the numbers can be finalised — not just recalculated.

SEBI ICDR Regulations require a minimum promoter contribution to be locked in for a specified period post-listing — a mechanism designed to demonstrate promoter skin-in-the-game to public shareholders. The lock-in computation depends on promoter shareholding structure, whether shares were acquired through conversion of loans or other instruments, and the specific issue structure. Shares beyond the minimum lock-in threshold, and non-promoter shareholding, are typically subject to shorter or no lock-in.

The SEBI LODR Regulations 2015 require, among other things: a Board with a prescribed minimum proportion of independent directors, a constituted Audit Committee with independent director majority, a Nomination & Remuneration Committee, a Stakeholders Relationship Committee, a formal related-party transaction approval policy, and — for larger companies — additional committees. Most privately-held Indian companies do not have this structure in place and need to build it well before the DRHP is filed, since SEBI and the exchanges scrutinise governance readiness as part of the listing process.

The DRHP requires complete disclosure of related-party transactions for the restatement period, and SEBI and the merchant banker's due diligence scrutinise whether these transactions were conducted on an arm's-length basis. Common issues include informal promoter loans without documented terms, cross-charges between group entities without a clear cost-allocation basis, and shared assets or personnel between the listing entity and other group companies. These need to be either regularised with proper documentation and arm's-length pricing, or unwound, well before the DRHP is drafted.

After the DRHP is filed and made public, SEBI reviews it and issues observations — formal queries on disclosure adequacy, accounting treatment, risk factor completeness, and any other matter it considers requires clarification or amendment. The company, its merchant banker, and legal counsel must respond to these observations, sometimes across multiple rounds, before SEBI issues its final observations. Only after final observations are received can the company proceed to file the Red Herring Prospectus (RHP) with the actual price band and open the issue.

The Draft Red Herring Prospectus (DRHP) is the initial offer document filed with SEBI, made public, and used to solicit SEBI's review and observations — it does not yet contain the final price band or issue size. The Red Herring Prospectus (RHP) is filed after SEBI's final observations are addressed; it contains the actual price band (or a fixed price, for a fixed-price issue) and is the document under which the issue actually opens for public subscription.

Yes — companies can and do postpone or withdraw a listing after DRHP filing, most commonly due to unfavourable market conditions, valuation concerns, or unresolved SEBI observations. SEBI's observation letter, once issued, has a validity period within which the issue must open; if the company misses this window, it may need to refile. A withdrawn or repeatedly postponed IPO carries reputational cost and makes a subsequent attempt more scrutinised, so the decision to file should follow a genuine readiness assessment, not external pressure to move quickly.

Section 143(3)(i) of the Companies Act 2013 requires the statutory auditor to report on the adequacy and operating effectiveness of the company's internal financial controls over financial reporting. This means documented process narratives for key financial cycles (revenue, procurement, payroll, treasury), a risk-control matrix identifying key controls, and evidence that these controls actually operated — not just existed on paper — during the period under audit. Most privately-held companies operate with informal, undocumented controls that need to be formalised well before the DRHP process begins.

This depends on independence requirements and the specific engagement structure agreed with the company and its existing statutory auditor. In many cases, PNPC's role is advisory — preparing the restatement working papers, IFC documentation, and related-party analysis — while the company's existing or a newly appointed statutory auditor issues the audit opinion on the restated financials, consistent with auditor independence norms under the Companies Act and applicable professional standards. We scope this explicitly with each client at mandate initiation.

Unlike a private placement, an IPO's price is ultimately discovered through the book-building process based on investor demand within a price band set by the company and merchant banker, informed by valuation benchmarking (comparable company multiples, DCF, and other methodologies) typically prepared or reviewed by the merchant banker with input from the company's financial advisors. PNPC supports this by providing the underlying financial data, projections, and comparable analysis, but the final price-band recommendation and book-building process is led by the merchant banker.

In a fresh issue, the company issues new shares and receives the proceeds, which are typically used for stated purposes disclosed in the DRHP (expansion, debt repayment, working capital, etc.). In an Offer for Sale, existing shareholders — often promoters, PE, or VC investors — sell a portion of their existing shareholding to the public; the company itself does not receive any proceeds. Many IPOs combine both — a fresh issue component and an OFS component — in a single offer document.

Existing ESOP schemes granted under Section 62(1)(b) of the Companies Act 2013 continue post-listing, but administration shifts to comply with SEBI's Share Based Employee Benefits and Sweat Equity Regulations once the company is listed. Vested but unexercised options, exercise pricing, and any accelerated vesting on listing (if the scheme provides for it) all need to be clearly documented and disclosed in the DRHP's capital structure section.

Post-listing, the company enters the continuous disclosure regime under SEBI LODR Regulations 2015: quarterly and annual financial results within prescribed deadlines, quarterly shareholding pattern disclosures, related-party transaction disclosures to the Audit Committee and, above specified thresholds, to shareholders, corporate governance compliance reports, an insider trading code administered under the SEBI (Prohibition of Insider Trading) Regulations, and event-based disclosures for material developments. This is a materially higher and more time-sensitive compliance burden than an unlisted private company faces.

Total IPO costs vary widely by issue size and complexity — merchant banker fees, legal counsel fees, our advisory fees for the financial and governance readiness workstream, statutory audit fees for the restated financials, printing and marketing costs, and regulatory/exchange fees. As a rough directional benchmark across the industry, total issue costs (excluding the capital raised itself) commonly range from a mid-single-digit to low-double-digit percentage of issue size, with larger issues typically achieving lower percentage costs due to fixed-cost components being spread over a larger base. PNPC's own advisory fee is agreed and confirmed in writing before engagement begins, scoped to the specific readiness work required.

Yes, in many cases — pending litigation does not automatically disqualify a company from listing, but it must be fully and accurately disclosed in the DRHP's litigation section, along with an assessment of potential financial impact. SEBI and the merchant banker's due diligence will scrutinise the materiality and nature of any pending matters, and a pattern of significant unresolved litigation — particularly involving promoters personally, or regulatory/criminal matters — can materially complicate or delay the process.

No — the Registrar to the Issue (RTA) is a SEBI-registered intermediary responsible for processing applications, allotment, refunds, and maintaining the register of shareholders during and after the issue. This is a distinct, specialised, and licensed function separate from PNPC's financial and governance advisory role. We coordinate with the RTA as needed on data handoffs relevant to the capital structure and shareholding pattern disclosures, but do not perform the RTA function ourselves.

The Competition Commission of India's Green Channel route offers automatic, expedited approval for certain categories of business combinations that meet defined low-risk criteria — it is relevant to M&A transactions, not to the IPO listing process itself. An IPO does not require CCI approval unless it is structured alongside a combination (such as a pre-IPO restructuring involving a merger) that separately triggers CCI notification thresholds.

This is often the least technical but most significant change many promoter-led Indian companies face: moving from informal, promoter-centric decision-making to a Board-driven governance structure with genuinely independent directors, formal committee approvals, and public disclosure of matters that were previously handled privately. We work with promoters early — well before the DRHP process begins — on both the structural changes (Board composition, committee constitution) and the practical mindset shift toward operating as accountable to public shareholders.

IPO Advisory is the full readiness, restatement, governance, and DRHP-coordination engagement described here, spanning 12–24 months and tied to an actual listing process. Business & Share Valuation is a narrower, standalone deliverable — a defensible valuation report for a specific statutory or transactional purpose (ESOP pricing, share issuance under Rule 11UA, shareholder buyout, M&A) without the broader readiness and disclosure workstream. Some clients start with a standalone valuation and later expand into full IPO advisory once a listing decision is made.

This does happen, particularly where a company's historical accounting was inconsistent or where informal group transactions were not properly recorded. When it occurs, we document the nature and cause of the discrepancy, assess its materiality, and — working with the company's statutory auditor and legal counsel — determine whether prior-period financial statements need formal restatement disclosure, and whether any regulatory notification (to tax authorities, lenders, or other stakeholders relying on the earlier figures) is required. Transparency at this stage, however uncomfortable, is materially better than a discrepancy surfacing during SEBI's review.

Yes. Where a company preparing for an Indian listing has UAE subsidiaries, a UAE holding entity, or material UAE-sourced revenue, our Dubai office coordinates the UAE-side financial data, transfer pricing documentation, and any UAE Corporate Tax or Economic Substance Regulation considerations that feed into the consolidated restated financials and DRHP disclosures — working alongside the India-based team rather than as a disconnected correspondent firm.

A pre-IPO placement is a private allotment of shares to select institutional or strategic investors shortly before the public issue, often used to secure anchor commitment or additional capital ahead of listing. Where undertaken, it must be properly priced, documented, and disclosed in the DRHP's capital structure and recent-allotment sections, and SEBI ICDR Regulations impose specific pricing and lock-in conditions on shares allotted in the period immediately preceding the IPO.

Yes — this is a genuinely common scenario, particularly for promoters weighing a strategic sale against a public listing as alternative liquidity or growth-capital paths. Because both engagements sit within our Corporate Finance practice, we can advise on the comparative merits of each path — valuation expectations, timeline, governance burden, and control implications — before the company commits resources to either process.

Eligibility under Regulation 6 of the ICDR Regulations is assessed against the preceding three (or, for operating profit, five) financial years at the time the DRHP is filed — it is a rolling test, not a fixed historical snapshot. A dip in a more recent year can affect the average operating profit calculation and, depending on severity, may affect eligibility under the standard route, potentially pushing the company toward the alternative QIB book-building route or a delayed filing until the numbers recover.

Yes, it is a legal-drafting term of historical origin, referring to the disclaimer statement (in red ink on the cover page in traditional practice) noting that the document does not yet contain the final price or issue size — it is a placeholder offer document filed for regulatory review and public information ahead of the final pricing. Functionally, the DRHP and RHP contain the same core disclosures; the RHP adds the finalised price band or fixed price and issue size once SEBI's review is complete.

Before any external engagement begins, we operate under a signed engagement letter with confidentiality provisions, and the readiness diagnostic itself is conducted with a small, need-to-know team. We advise clients on structuring internal communication about the process carefully, given that premature market speculation about a listing can affect commercial relationships, employee retention, and — closer to filing — trigger specific SEBI disclosure obligations around unpublished price-sensitive information.

A merchant banker's due diligence team assesses what is disclosed to them — it is not typically structured to spend months embedded in the company's finance function fixing the underlying Ind AS restatement, building internal financial controls documentation, or untangling related-party structures before the formal mandate begins. That preparatory work, done properly, is what makes the merchant banker's own due diligence and the subsequent SEBI review move efficiently rather than surface problems mid-process. We are the team that does that groundwork, ideally starting before the banker is even selected.

IPO-readiness diagnostic across financial, governance, and legal-history dimensions. Ind AS transition and three-year restated financial statement preparation. Internal financial controls design and documentation supporting Section 143(3)(i) auditor reporting. Related-party transaction rationalisation. Governance restructuring advisory — Board composition, committee constitution under SEBI LODR. Coordination of financial sections of the DRHP with the merchant banker and legal counsel. Support through SEBI's observation-response cycles. Post-listing compliance calendar design and support through the first quarterly reporting cycles. The precise scope is agreed and confirmed in writing for each engagement, since every company's starting point and target timeline differs materially.

IPO advisory fees are structured around the scope of readiness work required and the expected duration of the engagement — they are not a standardised, one-size-fits-all fee given how much company starting points vary. We provide a written scope and fee proposal following the initial readiness diagnostic, once we have a clear picture of the restatement, governance, and documentation work actually required. We are not the least expensive option in the market — the depth of hands-on restatement and governance work involved reflects sustained senior CA involvement over many months, not a one-time deliverable.

Starting the financial and governance readiness work too late — treating IPO preparation as something that begins once a merchant banker is appointed, rather than the 12–18 months of groundwork that should precede that appointment. Ind AS restatement, internal financial controls, and governance restructuring cannot be compressed into a few months without material quality risk, and rushed work in these areas is precisely what generates extended SEBI query cycles, due diligence delays, and — in the worst cases — a withdrawn or postponed issue.