Abstract:
Special purpose Acquisition Companies (SPAC’s) also referred to as “blank cheque companies” have emerged as innovative route for raising capital and facilitating mergers or acquisitions particularly in developed markets such as the united states. These entities formed without commercial operations, raise funds through IPOS with the sole purpose of acquiring or merging with an existing company. With global attention shifting towards alternative fundraising mechanisms, India too has begun exploring the feasibility of SPACs within its corporate and securities law framework.
Introduction:
In recent years, Special Purpose Acquisition Companies (SPACs) have emerged as one of the most significant innovations in global financial markets. A SPAC is essentially a “blank check company” formed with the primary objective of raising capital through an initial public offering (IPO) for the purpose of acquiring or merging with an existing business. Unlike traditional companies, SPACs do not have commercial operations at the time of their listing; rather, they serve as investment vehicles that provide an alternative route for private companies to access public markets.
The growing popularity of SPACs is closely tied to their potential to simplify the listing process, reduce regulatory complexities, and provide faster access to liquidity compared to traditional IPOs. Particularly in the United States and Europe, SPACs have gained momentum as a preferred financing structure for both investors seeking returns and companies aiming for expansion. However, their rise has also invited debates regarding transparency, governance, and investor protection.
In this context, understanding the legal framework, market dynamics, advantages, and criticisms of SPACs becomes crucial for scholars, regulators, and stakeholders in corporate finance. The study of SPACs not only reflects an evolving trend in capital markets but also provides insights into how financial innovations reshape traditional models of investment and corporate growth.