According to documents filed with the Ministry of Corporate Affairs (MCA), supply chain solutions provider Leap India is prepared to become a publicly traded business. The company has given its consent to be converted from a “private company limited by shares” to a “public company limited by shares” in accordance with LEAP India’s MCA filings. As a result, the company’s name has been changed from Leap India Private Limited to Leap India Limited, and the word “Private” has been removed.
Independent Director Appointments Signal Corporate Maturity
Additionally, the startup has nominated Sanjiv Gupta and Harinarayan Nair as two independent directors for a five-year term. Notably, news of LEAP India’s 2022 IPO revealed that the business was raising close to INR 1,000 Cr through the sale of shares. But in 2023, the international investment giant KKR bought the bulk of LEAP India.
In order to raise INR 535 Cr in a fundraising round headed by private equity giant KKR through its subsidiary Vertical Holding, LEAP India subsequently filed with MCA in December 2024. The round was also anticipated to include participation from Madhurima International, FirstBridge India, and Sixth Sense Ventures, among others.
LEAP India’s Strategic Acquisition of CHEP India
For an undisclosed sum, LEAP India purchased CHEP India earlier this year in order to increase its reach and fortify its supply chain presence in the nation. CHEP India assists companies with supply chain optimisation and the reduction of throwaway packaging. According to VCCircle in January, the company acquired ownership of CHEP India’s warehouses, clientele, and staff as part of the agreement.
Supply Chain Sector in India Sees IPO Boom
Established in 2013 by Sunu Mathew, LEAP India offers a broad range of supply chain solutions to a diverse clientele from various industries, including equipment pooling, returnable packaging, inventory management and movement, transportation, and repair and maintenance. The supply chain and logistics industry in India is flourishing due to rapid commerce, e-commerce, and technology improvements.
The supply chain industry is changing along with other industries thanks to robotics, blockchain technology, and artificial intelligence (AI). Shiprocket, an IPO-bound logistics platform, introduced Shunya.ai earlier this year. It is an agentic AI stack designed to enable D2C and micro, small, and medium-sized businesses (MSMEs) by enabling multilingual commerce.
The logistics titan filed the DRHP through a private process and is considering an INR 2,500 Cr IPO. In preparation for its first public offering (IPO), Shiprocket also became a publicly traded business in January. Most recently, as it prepares for an IPO, the board of Bengaluru-based fintech KreditBee allegedly approved the company’s conversion to a public business.
Supported by Info Edge, Nopaperforms is now a publicly traded company. The conversion was accepted by the company’s board at its May 22 meeting, according to its regulatory records that were accessed by a media outlet.
Later, on May 26, during an extraordinary general meeting, its shareholders approved the removal of the word “private” from its name. As a result, the startup’s name has been modified from “NoPaperForms Solutions Private Limited” to “NoPaperForms Solutions Limited.”
Companies that want to list on stock exchanges must first make the decision to become a public organisation. Meritto, registered as Nopaperforms, started getting ready to list on the exchanges around two months ago.
It was reported in March that it had chosen SBI Capital and IIFL Capital to lead its first public offering. The board of NoPaperForms then approved a plan to pursue an IPO, according to its investor, Info Edge.
Plans for the IPO
It is anticipated that the startup will soon submit IPO paperwork. According to various media reports, the startup is valued at approximately INR 2,000 Cr ($234 Mn), and its public offering would be between INR 500 Cr and INR 600 Cr ($60-70 Mn).
By the end of 2025, the listing is anticipated to become a reality. NoPaperForms, which was founded in 2017 by CEO Naveen Goyal and CSO Suraj Sapra, offers a range of software products for the education sector, such as campaign management, application management, and lead management systems.
It provides solutions for handling every stage of the student lifecycle, from initial inquiry to final enrolment, through its flagship platform Meritto. Additionally, the education industry’s many stakeholders can work together and effectively manage the admissions process thanks to its unified platform.
According to its records on Tofler, the startup earned a profit in FY24, reporting a standalone profit of INR 4 Lakh as opposed to a loss of INR 15 Cr in the prior fiscal year. From INR 48.2 Cr in the prior fiscal year to INR 70 Cr in the year under review, its revenue increased by 45.4%.
IPO Trend Blossoming Among Indian Startups
The SaaS startup’s listing would expand the number of publicly traded businesses emerging from Info Edge’s stable. Info Edge’s omnichannel jewellery business BlueStone is preparing to go public, while PB Fintech and Zomato have been listed for years.
Prior to submitting its RHP, the jewellery company hopes to raise pre-IPO financing at a unicorn value after receiving SEBI’s approval for its IPO in April. In the meantime, the nation has seen an increase in new-age tech IPO filings in recent weeks.
Major e-commerce company Meesho pre-filed its IPO documents today for a $1 billion IPO. Other modern technology businesses that have submitted their DRHPs to SEBI include Urban Company, Shiprocket, PhysicsWallah, Capillary Technologies, Pine Labs, and Curefoods, among others.
Most companies focus on IPO (Initial Public Offering) only after they have attained unicorn status. But, is it actually the criteria for it? After all, this is one of the best measures to generate funds for your company.
In this blog, we will discuss the various aspects of IPO and how you can determine whether your company is ready for IPO status.
Initial Public Offering or IPO is the process through which a private corporation offers its shares to the public for the first time, in new stock issuance. It is also a measure for the company to raise capital from public investors.
It is one of the ways for private investors to fully realize their investments. Sometimes it also works as an exit strategy for the earlier investors or founders by fully realizing their gains. It provides the opportunity for the company to obtain capital through their primary market by offering its shares.
Usually, the companies hire investment banks to help with the market demand and set the price for IPO.
How IPO works?
Total Value of IPOs in Public Markets of India from 2015 to 2021
A company before IPO is considered a private firm. It only comprises of a few shareholders including the founders, cofounders, or professional investors like angel investors or venture capitalists.
IPO does not just allow the company to gather capital but, it also provides an opportunity to expand and grow faster. As stated earlier, typically the companies that have acquired unicorn status i.e., have reached the valuation of 1 billion, advertise their interest in going public.
However, private companies that have proven their calibre for profitability and have well-built fundamentals can also qualify for an IPO. A company should reach the maturity stage where it is able to stand up to the rules and regulations of the Securities and Exchange Commission (SEC).
Also, it should be able to take care of the benefits of the shareholders and its responsibility towards them. Overall the market competition and the company’s ability to deal with the list of requirements make it eligible for starting the IPO process.
When a company decides to go public, its previously private shares are converted into public shares. The worth of the shares already existing with the previous private shareholders becomes equal to the public trading price.
Now, every individual who is interested in investing in the company has the opportunity to contribute towards the company’s shareholders’ equity. Therefore, the new value of the company’s shareholders’ equity depends upon the number and price of shares it sells.
The IPO process is divided into two parts, the premarketing phase and the actual initial public offering. A company first advertises to underwriters, these are the individuals responsible for evaluating and assuming the company’s risk for payment.
These underwriters are requested for private bids after which the company chooses one or more of them to lead their IPO process. There can be several underwriters responsible for managing different parts of the process viz. filing, marketing, document preparation, etc.
The various steps included in the IPO process are as follows:
Proposals
After the company’s advertisement, underwriters submit their proposals describing their services, offering prices, share amount, as well as the time duration for the market offering.
Underwriter selection
The Company goes through the proposals and then chooses the underwriter and an underwriting agreement with terms is prepared.
Team formation
A team comprising of underwriters, lawyers, SEC experts, and Certified Public Accountants (CPA) is formed to lead the process.
Documentation
The primary document for IPO filing is the S-1 Registration Statement which is divided into two parts viz. the prospectus and the privately held filing information. This document also includes information regarding the expected filing date. It undergoes multiple revisions throughout the pre-IPO process.
Marketing & Updates
New stock of issuance is pre-marketed by the underwriters and executives to estimate the market demand for deciding the final offering price of the shares. Throughout the marketing process, underwriters revise the financial analysis based on market response. This might also include changing the issuance date or even the price of the IPO. The SEC as well as exchange listing requirements are well taken care of by the companies.
Board & Processes
A Board of Directors is formed to look after the financial and accounting information as per the audit requirements for quarterly reporting.
Issuance of Shares
The Company issues the shares on the pre-decided date. The primary shareholder issuance is received as cash and is recorded in the balance sheet as stakeholder’s equity.
Post-IPO
There are certain post-IPO provisions. The underwriters also have the opportunity to buy additional shares within a specified time duration.
The key objective of an IPO is to raise additional capital for a company. It also benefits the company through increased prestige and exposure amongst the public which may boost sales and profits. Moreover, IPO can help a company lower the cost of capital for both equity and debt.
Every year several companies start their journey as an IPO. India saw an IPO boom in 2021 with around 125 companies making their debut in the market.
Although the highest number of IPOs were registered in 2017 reaching a mark of 172, the capital raised was highest in 2021. These 125 companies raised around 18 billion USD in comparison to 10 billion USD by 170 companies in 2017.
Other than earning handsome returns, the companies listed in the IPO have also experienced strong gains in listings as well as an increased number of subscribers. Zomato and Tatva Chintan Pharma are an example of this.
But, what does it take for a company to be IPO-ready? In this section, we will discuss the factors that differentiate an IPO company from others.
The process to become IPO-ready is long and tedious. It isn’t so that a company thinks of it and makes an announcement the next day. A number of things have to be managed.
The process of getting IPO ready begins at least 12˗18 months before the actual announcement. Some of the major factors looked after during this time frame include:
Influential Board of Directors
When you are thinking of bringing your company to the public for funding, having a board comprised of members well recognized for their potential and decisions is always a good idea.
This plays a significant role in establishing your firm as a reputed and confident organization. This is why most companies focusing on getting IPO-ready look for admired experts from different sectors.
There are a number of examples in the market to prove this fact. For example, ixigo is an AI-based travel portal. Just sometime before the company filed for IPO they hired former IRCTC Chairman, Mahendra Pratap Mall as one of the board members.
Similarly, former HDFC MD, Aditya Puri joined API holdings, PharmEasy’s parent company, before their announcement of being an IPO contender.
Restructuring the Business
Internalrestructuring mightbe required by some businessesto put theirbest arm to work. However, just like the board, these decisions must also be taken well in advance before the IPO process begins.
For example, in Nuvoco Vistas, the cement arm of Nirma group, internal restructuring was undertaken before IPO. As a part of it, the Rajasthan cement unit was brought under the hold of the firm. The company had a 5000 crore IPO.
Physical or Digital
The experts claim that the coming time would make it mandatory for Indian businesses to work in both physical and digital ways. Taking this into caution, many deals are being made, where a digital business acquired a physical one and vice versa.
These deals are majorly done for scaling up, by filling in the gaps in the portfolio and strengthening different verticals of the company.
For example, Pharmeasy, an online pharmacy startup acquired a 66.1% stake in diagnostics chain thyrocare technologies, for Rs 4,546 crore, to diversify its business.
Experts believe that more such omnichannel transactions will follow in the coming time and such deals will soon become a part of pre-IPO requirements.
Executive Support
Another important but often ignored aspect of IPO is finance function. While most businesses focus on a board full of influential directors there is the least attention paid to the finance division.
The fact is that during the entire IPO process the company face a number of stumbling blocks. That is why they need a team who can back them up during their stresses.
Considering an experienced Chief Finance Officer (CFO) for the company is a great step to include in the IPO process. After going public, the CFO has to face challenges such as greater reporting, governance, regulatory, and audit standards.
Although not seen everywhere but the food delivery company Zomato, opted for a new CFO well before its IPO process. They promoted their Corporate Development Head, Akshant Goyal, to the position of CFO.
Businesses should also look for experienced individuals for the posts such as executives, company secretaries, etc.
Financial Transparency
Irrespective of business size or model, financial transparency forms an essential aspect of the IPO process. This is also a part of the equity strategy of the IPO-bound company.
Generally, financial statements for the past 3 years before the IPO announcement are considered optimum. Yet, experts believe that preparing financial statements and subjecting them to review by the board must begin well in advance.
In many cases, the lack of quality financial statements becomes the reason for missing the IPO timelines while other such reasons maybe not be SEBI ready.
For a startup or any business going public means more responsibility, financial discipline, planning as well as its execution.
There is a tough road ahead so before you finally decide to have IPO, the following checklist must be marked:
Growth
Investors will only be interested in spending their money on a healthy and thriving business. With growth, here we mean revenues. Growing revenue is an indicator that the company has more new customers, or old customers buying more products and that the customer churn rate is low.
Experts believe that revenue growth of 30% for the last two years will ensure that the company will be able to stand against its competitors in the market.
Capital
Although gathering resilient capital is the main reason for any business to opt for IPO but going public at a time when the business really needs capital can be the worst decision.
There should be enough cash in your balance sheet not just to attract investors but also to make you appear trustworthy. Just like you, investors are also here for the money. They want to see that soon their investment will be able to provide them with good returns.
Market Size
Large market size is an indicator of opportunity and potential. This means the company is able to expand without much hassle.
Although calculating the exact market size can be tricky, it is traditionally done by gauging the revenues of the legacy players. Also, factors like high growth, scaling up, etc., are indicators of good market size.
Competitors
Direct or indirect, having a track of competitors is important. The investors would only want to spend their money on a winning bet. The overall IPO opportunity as well as the total addressable market depends upon the competitors.
A more crowded market tends to receive a lower valuation. Unless there is a clear differentiation between the company under question and other competitors in the market, it is difficult to bag the deal.
A systematic, dominant company with an already large market is preferred by public investors.
This refers to the analysis per product revenue and cost. This helps in isolating the core cost of the business and helps gauge how the business would perform at maturity. It also analyses the long-term margins.
Leadership
Good leadership inspires the trust of investors. The CEO and CFO are the faces of the company. The reputed and recognized faces help attract public attention as well as investment.
So before thinking about IPO, think about the board of directors, executives, and finance in charge of your company.
Legal Compliance
The company should be a law-abiding entity and must have all the required licenses and other necessary formalities completed as per law. Not having any legal issues pending strengthens the trust of the investors.
Therefore, it is also essential to get rid of any vetting issues. Any vetting issues must be managed with utmost concern before the company is listed for IPO
It is always good to have a legal team to guide you through the process. They may also be helpful in the preparation of documentation submitted during the time of IPO processing, ensuring that they are as per the rules and regulations of the Security and Exchange Commission. Moreover, the company should be apt with the tax payment and other legal responsibilities.
Conclusion
We have shared with you an extensive checklist while trying to cover major aspects of the IPO process and the necessary details that must be taken care of before deciding to go for it. Still, the IPO process is complex and always requires expert advice.
It is essential to go through every detail carefully while making the final decision. The legal, as well as financial issues, must be handled as a priority without ignoring the other related functions.
FAQs
What are the benefits of buying an IPO?
There are several benefits of buying shares in an IPO such as:
High growth potential
High chance of big returns in the long term
More price-related transparency
Shareholder ownership authority
Small investments may provide great profit
How can I buy shares in an IPO?
Buying shares in an IPO is a complicated task. This is the common procedure for buying shares in an IPO:
Choose the right IPO
You must have a Demat account/trading account and PAN card with a broker that offers IPO access
Arrangement of Funds
Bidding of Shares
Get an allotment of shares
How can I find the best IPO?
To find the best IPO you need to do the following things:
What is one common thing among the founders of famous companies like Google, Ford and Facebook that allows them to have complete control over the decision-making of their companies? The answer to this question is dual-class shares.
I know you are very confused about what dual-class shares are and what advantages and disadvantages they offer to the founders. Don’t worry I will explain to you about dual-class voting shares in great detail without technical jargon. We will also talk about companies with dual-class stock structures.
In dual-class shares, the founders own a small portion of the company’s total stock but they have the maximum voting power. For example, a company may issue class A and class B shares. Both these shares may have different voting power and dividend payments.
In this scenario, class A shares which have limited or no voting rights are offered to the general public while class B shares which have the maximum voting power are offered to the founders, executives, and family.
Why Dual-Class Voting Shares are Used?
Founders who want to enter the public equity markets for financing but want to gain full control over their company opt for dual-class stocks. Using this strategy founders can focus on their long-term vision. They don’t have to worry about their investors who just want profits.
Famous Examples of Companies That Use Dual Class Structure
Google
Alphabet subsidiary Google issued two classes of shares in 2004. Here, class A was offered to the general public which carried one vote per share. Although Class B which was offered to the founders carried 10 votes. Later, the company issued class C shares that had zero voting rights.
Ford
The Ford family has also issued two classes of shares: Class A and Class B. The family owns the class B shares which gives them 40% of voting power with just 5.0% of the total equity in the company.
Facebook
Facebook also follows a dual-class common stock structure. Mark Zuckerberg and his close executives possess class B shares which carry 10 votes. Zuckerberg owns 75% of class B shares which allows him to control 58% of Facebook’s votes.
Advantages of Dual Class Shares
The biggest advantage of dual-class voting shares is that the founders have complete control over the decision-making and functioning of the company.
The company can still get public financing without worrying about giving too much voting power to its investors.
Founders can focus on long-term growth. It protects the company from investors who only want to gain profits.
Disadvantages of Dual Class Shares
Dual-class voting shares give unfair voting rights to their investors.
Super voting rights in the hands of the founders and executives weaken the structure of the company.
The structure of the company cannot be easily transformed into a single class.
A study from the National Bureau of Economic Research provided strong evidence that the company which follow a dual-class structure face more debt than single-class shares.
Shareholders can make bad decisions with few consequences.
Conclusion
As you can see dual-class voting shares allow the founders and insiders of the company to have complete control over the company with limited shares.
Almost every other founder wants to focus on the company’s long-term goals and doesn’t want to allow investors to control the decision-making of the company. That’s why well-known founders are implementing a dual-class structure in their respective companies.
Although dual-class voting shares do have their own cons. The founders and investors should understand the benefits and consequences of dual-class voting shares.
FAQs
What is a dual-class share?
In a dual-class stock structure, a company issues two classes of shares: Class A and Class B where one of the shares have more voting rights than the other one. For example, class A shares which are offered to the general public have one vote per share. While class B shares which are offered to the founders and insiders of the company can have 10 voting rights.
What are the benefits of Dual-class shares?
Since the founders have higher voting rights with a limited amount of stock they can have complete control over the decision-making of the company. They can focus on long-term goals. This protects the company investors who only aim to make profits.
Is it unfair or unethical for corporations to create classes of stock with unequal voting rights?
No, it is not unfair to issue stock with unequal voting right since the company before issuing its shares tells the general public and investors that they will be following the dual-class structure. Investors know all the terms and conditions and are under no obligation to buy the shares.
What happens when a public company goes private? Why would a publicly-traded company make that decision? What are its options once it does? It’s difficult to know how to answer these questions if you have no background information on the subject. To help you get some insight into what happens due to these transactions, we’ve collected seven pointers about going private and provide some insight into what happens due to these transactions. Hopefully, this guide answers your questions and helps you understand what happens if a publicly-traded company decides to pursue another route.
No. of Companies listed on Stock Exchange in India
Once a company goes private, it’s removed from the stock exchange. Investors will no longer be able to purchase or sell shares in the company through a major stock exchange.
The company’s management team may still hold on to some of their shares, which they may sell in the future for a profit. But for most investors, this is the end of their involvement with the company.
The company’s shares are withdrawn from the stock market
When a publicly-traded company goes private, its shares are withdrawn from the stock market. This is a major shift for investors, who are used to seeing their investments on display on the stock exchange.
Management often decides to go private, but investors can also initiate it. In some cases, an investor may buy out other shareholders and control the company. In other cases, multiple investors pool their resources and buy out existing shareholders.
Existing Shareholders get paid
When companies go private, their shareholders can receive various payout options. These include:
Cash payments to each shareholder are based on the number of shares they own. The payout can either be in one lump sum or spread over time.
Stock in a new company is formed when the parent company goes private. This stock could pay dividends or be sold for cash later.
New shares in the parent company that’s going private. Once those shares become publicly traded again, it’s possible for investors who hold them to make money off their original purchase price or by selling them at some point down the line.
The company no longer releases financial statements to the public
Once a company goes private, it no longer releases financial information to the public. This means that investors who had previously owned shares of the company in question will no longer have access to any information about its finances or performance. However, this does not mean that the company goes completely dark: companies can still be purchased and sold by other companies using private transactions, which means that their financials are still available to their owners.
The only major difference is that these transactions are not recorded on any stock exchange. Instead, they must be reported to regulatory bodies such as the Securities and Exchange Board (SEBI), allowing them to track how many outstanding shares exist within the private sector.
Fewer regulatory requirements and obligations
By going private, a publicly-traded company no longer has to deal with the many regulatory requirements of being a publicly-traded company. These include:
Annual reports: are required for publicly-traded companies and must be submitted to the SEBI.
Audited financial statements: audited financial statements must be submitted to the SEBI for publicly-traded companies. This requirement helps ensure that investors access accurate information about their investments.
Required disclosures: publicly-traded companies must disclose information about their operations and management team to the public via annual reports and other filings with the SEBI.
Corporate governance: corporate governance refers to how businesses are run internally—for example, whether shareholders have voting rights over key decisions made by management, or who sits on boards of directors at large companies.
Less capital available
The reason for this is simple: a public company must disclose its financial statements, which means anyone can access them. This is great for investors who want to get in on the action and make money from their investments. Still, it’s not so great for companies that want to be able to keep their financials secret to protect proprietary information or avoid scrutiny from government regulators.
By going private, companies can keep their financials under wraps and more of their profits for themselves!
A public company that goes private no longer has to contend with quarterly pressures.
Public companies are accountable to their shareholders, who demand that the company generate quarterly revenue and profit. These demands make it difficult for companies to focus on long-term goals, often leading to short-term planning and poor decision-making.
Private companies have more freedom: they can focus on their long-term goals without worrying about those pesky quarterly reports!
More flexibility
When a public company goes private, it gains more flexibility in its operations. This means that the company can make decisions that may be unpopular with investors but which are better for the business’s long-term health.
For example, a public company might cut costs to boost profits and increase shareholder value. This could involve layoffs or outsourcing certain aspects of operations. However, when a public company goes private, they no longer have to worry about shareholder concerns and can focus on what is best for the business as a whole.
There is a lot at stake when a public company goes private.
So there you have it, folks. That’s what happens to a company when it goes private. Of course, this article is only meant to be a general overview of the process. It may be worth learning more about private equity firms and the going-private phenomenon in general; then, you should do further research on those topics.
This post’s subject can be applied to almost any situation involving a significant change in company ownership and structure. While there are many options that can be pursued when taking your company public or private, keep in mind the information above: timing and valuation matter. If you’re ready to make the leap, talk to an investment banker or investment broker/advisor, they can help!
FAQs
What is privatization in public sector?
Privatisation of public sector means the transfer of ownership, management, and control of the public sector enterprises to the private sector.
Which sectors are privatised in India?
The sectors privatised in India are:
Atomic Energy
Space and Defence
Transport
Telecommunications
Power
Petroleum
Coal and other minerals
Banking, insurance, and financial services
What happens if public company goes private?
When a Public Company Goes Private:
The company is removed from the stock exchange
The company’s shares are withdrawn from the stock market
Existing Shareholders get paid
The company no longer releases financial statements to the public
Which are the public companies that went private?
Some of the popular public companies that went private are:
