The Future of Spacs in India: Legal Readiness and Market Potential
Keywords:
SPACs, Special Purpose Acquisition Companies, SEBI, Indian capital markets, reverse merger, de-SPAC transaction, IPO, corporate lawAbstract
Special Purpose Acquisition Companies (SPACs) have emerged as a disruptive financial innovation globally, offering an alternative route to public listing through reverse mergers. While jurisdictions like the United States and Singapore have developed clear regulatory mechanisms to facilitate SPACs, India remains in the early stages of grappling with the feasibility and legality of such instruments. This paper explores the current legal framework in India governing SPACs, analyses the absence of a dedicated
regulatory regime under SEBI and the Companies Act, 2013, and evaluates the systemic barriers that hinder their adoption—such as restrictions on shell companies, ambiguity in taxation, and merger approvals. Through a comparative study with global regulatory models and a critical examination of policy developments, including SEBI’s recent consultations and GIFT City's role as an experimental sandbox, the paper assesses India’s legal readiness to accommodate SPACs. It further delves into the
market potential for SPACs in unlocking capital for high-growth sectors such as fintech, edtech, and healthcare. The paper concludes with forward-looking for regulatory reform that balance investor protection with capital market innovation, ultimately arguing that a well-regulated SPAC regime could strengthen India’s position as a global financial hub.
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