What are the basic legal steps for taking a company public through an IPO in India?

Question

My company's board is considering an initial public offering. What are the key regulatory steps under SEBI's IPO framework? I have been reading conflicting things online and I would like to understand what Indian law actually says about this, which Act and Section applies, what the realistic timelines and costs are, and what I should be doing right now to protect my position. If the matter can be resolved without litigation I would prefer that route, but I want to know what my rights are before I agree to anything or sign any document.

MyVakeel Legal Desk · Accepted Answer

What are the basic legal steps for taking a company public through an IPO in India? is governed in India primarily by SEBI Issue of Capital and Disclosure Requirements Regulations 2018, Regulation 6, SEBI Issue of Capital and Disclosure Requirements Regulations 2018, Regulation 26 and Companies Act 2013, Section 26. The short answer is set out below, followed by the practical steps most people in this situation need to take. Read it alongside the specific provisions named, because the exact relief available to you turns on the facts you can prove on paper.

Regulation 6 of the SEBI ICDR Regulations 2018 sets out eligibility conditions for an initial public offer, including track record of net tangible assets, distributable profits, and net worth requirements, or alternative routes for companies not meeting these criteria such as the qualified institutional buyer allocation route.

The company must file a draft red herring prospectus with SEBI and the stock exchanges under Regulation 26, disclosing financial statements, risk factors, use of proceeds and litigation, which SEBI reviews before permitting the issue to proceed.

Section 26 of the Companies Act 2013 requires every prospectus to state prescribed information and reports, and imposes civil and criminal liability under related provisions for any untrue or misleading statement made in the prospectus.

The IPO process further involves appointment of merchant bankers, registrars, and legal counsel, pricing through fixed price or book-built methods, and compliance with minimum public shareholding norms post-listing.

Post-listing, the company transitions into ongoing compliance obligations under the SEBI LODR Regulations 2015, including continuous disclosure, corporate governance norms and periodic financial reporting.

What to do next: 1) Confirm eligibility under Regulation 6 or identify the appropriate alternative route; 2) Appoint merchant bankers and legal counsel to prepare the draft red herring prospectus; 3) File the draft prospectus with SEBI and address observations before finalising the offer; 4) Plan for post-listing compliance under the LODR Regulations well before the listing date.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — most remedies under SEBI Issue of Capital and Disclosure Requirements Regulations 2018, Regulation 6 carry limitation periods, and a delay you cannot explain weakens an otherwise strong case. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in this practice area.