IPOs on the rise: Why Yash Ashar thinks it's a great time to be a capital markets lawyer

The Economic Survey of India 2025, released on February 1, highlighted a significant growth in the country's Initial Public Offerings (IPOs). 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 as 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.Ashar has worked on top IPOs such as Hyundai, LIC, the historic FPO of Vodafone Idea and Maruti Suzuki. In this enlightening conversation with Bar and Bench, he discusses the role of lawyers in an IPO, the due diligence process they undertake, the legal support they give to a company after the IPO among other things.In this conversation with Bar & Bench's SN Thyagarajan, he discusses the role of lawyers in an IPO, the due diligence process they undertake, the legal support they give to a company after the IPO, and more..What are your primary responsibilities as a lawyer during the IPO process?.Until 2000, underwriters drafted offer documents in India. However, since then, the entire responsibility has now moved to law firms. Yash Ashar.An IPO is a complex process and lawyers play a key role. The primary parties in an IPO are the issuer and the underwriters. Both have their own lawyers on every IPO. Additionally, domestic and international law firms could be involved. Lawyers for the company are responsible for advising the company and its Board of Directors on matters relating to the IPO. This would include preparation (drafting) of the offer document, including disclosures of key issues and risk factors, basis their legal due diligence and discussions with the company and its underwriters. The aim is to ensure compliance with regulatory prescribed disclosures as well as to ensure that all material information is presented in the offer document. They also negotiate agreements on behalf of the company and the promoters. Lawyers for the underwriters review the work done by the company lawyers and draft the main agreements between the company and the underwriters, including the issue/offer agreement and the underwriting agreement. They also negotiate auditor deliverables, including the comfort letter, to be issued by the auditors of the company to the underwriters. Legal and compliance departments of the underwriters rely on their lawyers for committee call preparations, review of research reports and other risk management queries. Until 2000, underwriters drafted offer documents in India However, since then, the entire responsibility has now moved to law firms. .What specific legal due diligence do you conduct for the company before the IPO? .Legal due diligence for an IPO is an intense and detail-oriented exercise. It involves reviewing corporate records, including board minutes, shareholders’ minutes, constitutional documents and related papers and filings. We would also review material business contracts, shareholder arrangements, loan and security documents, regulatory filings, licences and approvals, land records and litigation involving the company. In addition, there will typically be Q&A sessions with the senior management as well as intermediaries such as the statutory auditor, industry experts etc. .Can you explain how you assist in the preparation of the draft red herring prospectus (DRHP)? .After legal due diligence and discussions with the company, the underwriters and lawyers, the DRHP is drafted. Lawyers typically prepare a draft of the offer document on the basis of diligence and information provided and then solicit comments from the issuer and underwriters to flesh this out. The lawyers’ role is to ensure that regulatory prescriptions on disclosure are met, as well as to ensure the thumb rule of disclosures being adequate for an investor to make an informed decision. The preparation of the DRHP is an iterative process, involving several rounds of discussions and drafts by the counsel. .What ongoing legal support do you provide after the IPO is completed? .We support the company prior to listing with their policies and even on-board appointments, as well as identify key gating issues for the transaction and any points that require prior discussion with the regulators. Post the IPO, we advise on compliance with listing regulations, insider trading norms and other matters from time to time. We also help ensure the company meets the minimum public shareholding norms in the coming years..How do you help the company navigate potential legal risks associated with the IPO? .Primarily, our role as company counsel is to protect the board of the company. Risk assessment for the company is done in various ways. The diligence process helps identify any existing concerns, as well as flag potential risks going forward. In certain cases, the company may have to file for compounding or other action to correct past delays and problems. In other cases, it would be through robust disclosures to enable investors to make their own investment decision. For example, companies that are dependent on few customers may have a risk reflecting loss of customers as an issue. In rare instances, where we are of the opinion that a company’s past actions can’t be rectified, we would even advise the company and its board to delay the issue or not undertake it at all. .You have been in this field for two decades. What changes have you observed in the capital markets sector in India? .Over the years, Indian capital market lawyers have increased and are dealing with unprecedented complexities. So, it has been a fantastic period and an honour to have a ringside view.Yash Ashar.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 requirements, whilst detailed, are sometimes necessary. We are also slowly, but surely, moving away from relationship-based interactions to rule-based ones. While it can occasionally be challenging, when considered objectively, it is equitable and indicative of a mature economy and regulatory environment. There is an increasing number of regulatory requirements and knowledge that must be considered in every transaction. Indian and global investment banks have also grown and realised the potential of India. Over the years, Indian capital market lawyers have increased and are dealing with unprecedented complexities. So, it has been a fantastic period and an honour to have a ringside view. .How is the remuneration structured for law firms working on IPOs, and what factors influence the fees charged during this process?.This is largely based on a lumpsum model with well identified milestones. Some sectors, such as real estate and infrastructure, require more work and the fees can be higher. Working with new-age technology companies is also interesting as they are more flat and decision making is more involved. One would hope that lawyers could also charge fees based on the issue size, but alas such things don’t happen!