IPO Advisory Services India: The Process, Start to Finish
The mechanics of IPO Advisory Services India are what clients ask about once they have decided to proceed. The questions below are the ones raised most often in practice; the full scope of the service is on the IPO Advisory Services India page.
What exactly does PNPC do in an IPO — are you the merchant banker?
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.
In practice: It often makes sense to start readiness work before a merchant banker is selected — because the readiness diagnostic determines whether the company is genuinely ready to approach a banker at all, and which route (Main Board vs SME) makes sense.
How long does the IPO process actually take from decision to listing?
For a Main Board IPO starting from a private company that has never reported under Ind AS and has an underdeveloped governance framework, the timeline is longer and depends on how much restatement and governance work remains. Companies that already report under Ind AS with reasonably mature governance can move faster. SME platform issues follow a separate framework under the SEBI ICDR Regulations, with the draft offer document filed with the SME exchange rather than SEBI; SME eligibility norms have been tightened recently, so confirm the current criteria. The single biggest variable is the Ind AS restatement and internal financial controls build-out — not the SEBI filing process itself.
In practice: Founders consistently underestimate the restatement timeline. We recommend starting the readiness diagnostic well before any target listing date — even if a merchant banker will not be formally engaged until later.
What is 'promoter lock-in' and how does it affect founders?
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.
In practice: We map promoter lock-in exposure early in the readiness diagnostic — it affects how founders and early investors plan any liquidity needs around the listing, and surprises here are avoidable with early planning.
What governance changes does SEBI require before a company can list?
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.
In practice: We recommend starting governance restructuring well ahead of the target DRHP filing — appointing genuinely independent, qualified directors takes time, and a governance structure assembled hastily just before filing reads as exactly that to SEBI and to institutional investors.
How are related-party transactions handled in the IPO 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.
In practice: This is consistently one of the most time-consuming parts of readiness work. Group structures that evolved informally over years — common in promoter-led Indian businesses — often require a genuine restructuring exercise, not just better paperwork.
What happens after SEBI reviews the DRHP — what are 'SEBI observations'?
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.
In practice: The financial and accounting queries in SEBI's observations are where our work is most directly tested — well-prepared restated financials with clear supporting documentation materially shorten this back-and-forth.
Can a company withdraw or postpone an IPO after filing the DRHP?
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.
In practice: Proceeding with DRHP filing under external pressure — from investors wanting an exit, or from a merchant banker eager to close a mandate — before governance and financial readiness are genuinely complete is a real risk; a delayed or withdrawn issue is far more damaging than a longer, better-prepared runway.
What internal financial controls does a company need before listing?
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.
In practice: Retrofitting IFC documentation in the months immediately before DRHP filing is a common cause of delay. It is better to start well in advance, in parallel with Ind AS restatement.
What does a valuation report contribute to the IPO process, and who prepares it?
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 practice: The valuation conversation in an IPO is materially different from a private fundraising valuation — public market comparables, listed-peer trading multiples, and institutional investor sentiment carry far more weight than in a private round.
Where this sits in the wider engagement
IPO Advisory Services India rarely arrives on its own. The statutory basis and the current requirements are set out on the IPO Advisory Services India service page, and the related services are grouped under Corporate Finance.
What PNPC does
PNPC Global has practised since 1986 across India and the UAE. On IPO Advisory Services India we take the work end to end — reviewing the facts, preparing and filing what is required, and dealing with the authority through to closure.