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Tata Play and ideaForge Technology Receive Green Light from SEBI to Float IPOs

Non-promoter shareholders can now help meet the minimum promoters' contribution for IPO-bound companies

D2H platform Tata Play and Mumbai-based drone manufacturer ideaForge Technology received the financial markets regulator SEBI’s go-ahead to raise money through Initial Public Offerings (IPOs).

Tata Play became the first company in India to use the confidential pre-filing of draft papers option for an IPO on November 29, a month after introducing the new route. It obtained the regulator’s observation letter on April 26. Tata Play must now submit an Updated Draft Red Herring Prospectus (UDRHP) before launching the IPO that must include the observations made by Sebi in the letter.

Tata Play could even be the first company from the Tata Group to launch an IPO in almost 19 years. The joint venture between Tata Sons and The Walt Disney Company aims to raise around Rs 3,000 crore via the IPO, which can be a mix of new and secondary share sales.

Under the confidential filing or the pre-filing route, an unlisted company can keep its offer document private until it firms up its IPO plan. Moreover, in the pre-filing route, an IPO can be floated within 18 months from Sebi’s final comments compared to 12 months in the conventional route. This route also provides flexibility to change the primary issue size by up to 50% till the UDRHP stage.

IdeaForge Technology, which submitted its preliminary paperwork to the regulatory body in February of this year, received its observation letter on April 13. Its observation implies that SEBI has given the IPO the go-ahead to use its terminology.

According to the draft documents, IdeaForge Technology’s public offering consists of an offer to sell 48,69,712 equity shares and a new issue of equity shares valued at Rs 300 crore.

The selling shareholders in the IPO will be Amarpreet Singh, Nambirajan Seshadri, Naresh Malhotra, Sujata Vemuri, Sundararajan K Pandalgudi, A&E Investment LLC, Agarwal Trademart, Celesta Capital, Export-Import Bank of India, Indusage Technology Venture Fund, Qualcomm Asia Pacific Pte Ltd, Society for Innovation and Entrepreneurship and promoter Ashish Bhat.

Rs 50 crore of the new offering will be used to pay down debt, Rs 135 crore to meet working capital needs, and Rs 40 crore to invest in product development and other general corporate objectives.

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