Capital markets

A company that raises capital from the public markets, or that is already listed, operates under a different and more continuous set of obligations than one that raises capital privately. Capital markets work covers both ends of that distinction: the process of getting to a public issue, and the obligations that continue once listing is complete.

Getting to market

An initial public offering involves preparing offer documentation, coordinating with merchant bankers, and satisfying the eligibility and disclosure requirements set out in the Securities and Exchange Board of India's Issue of Capital and Disclosure Requirements Regulations. The process runs alongside a company's own governance readiness. Board composition, related-party policies and internal control frameworks generally have to be in place before an issue can proceed, not assembled afterward.

Continuing obligations

Once listed, a company operates under the Listing Obligations and Disclosure Requirements Regulations, which govern what has to be disclosed, when, and to whom, along with requirements on board composition and related-party transactions that continue for as long as the company remains listed. Trading window restrictions and disclosure obligations apply to the company's insiders under the insider trading regulations, and any change in substantial shareholding or a takeover attempt is governed by a separate set of triggers under the takeover regulations.

Raising capital privately

Not every capital raise goes through a public issue. Preferential allotments and private placements of equity or debt allow a company to raise capital from identified investors, subject to their own pricing, disclosure and shareholder approval requirements under company law and, where applicable, securities regulation. What a company has to decide is which route, public or private, fits its stage, its capital requirement and its appetite for the continuing disclosure obligations that a public listing brings, since the compliance burden of being listed does not end once the issue closes; it becomes a standing feature of how the company is run.