India’s Unicorns well-suited to list overseas via SPAC route: Grant Thornton Bharat

India’s Unicorns, especially those in the renewables and tech space, are well-suited to list overseas via ‘SPAC’ route said consultancy firm Grant Thornton Bharat.

In industry parlance, ‘SPAC’ or ‘Special Purpose Acquisition Company’ is actually a shell company with no business operations which is created mainly to raise capital, through an IPO, to make acquisitions.According to Raja Lahiri, Partner, Growth & Overseas Listing Leader, Grant Thornton Bharat, Indian renewables and technology firms, considering the SPAC route, stand to benefit from $135 billion liquidity in the US market. “In the last 15 months, out of the $170 billion plus capital raised in the US, around $135 billion is dry powder signalling a great opportunity for Indian companies, especially the ones in renewables and tech who are already considering the SPAC route,” he said.

As per data, between 2017 and 2020, TMT, Industrial, and Consumer sectors accounted for 60 per cent of completed SPAC transactions in the US.

“Imagine the growth India can achieve if we were to get even a 10 per cent slice of the dry powder sitting in the US as new-age companies will not only be able to fast-track their growth but contribute towards sustainable job creation in the process,” said Vishesh C. Chandiok, CEO, Grant Thornton Bharat.

The capital raised by US SPAC’s in 2020 and during the first two months of 2021 was $83 billion and $90 billion respectively, which comprised 50 per cent and 70 per cent of capital raised from IPO in US Capital markets.

“The dry-powder available at SPACs is $135 billion which is waiting to find M&A targets and hence, the opportunity for Indian corporates to look at SPAC listing actively is massive.”