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IPO- Consent from Financial Institution

Neeraj Kalawatia (Risk Manager) (28 Points)

22 September 2010

Is it mandatory for companies to obtain the consent from Banks & Financial Institution for an IPO issue ?

If such is a cases, what should be the nature of such Consent from lenders side ?

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5 Replies

vivek (CS) (751 Points)
Replied 22 September 2010

Upto my understanding;

There is two matter in your question:-

1. Consent of Banker to the issue- definitely you will have to seek the consent of bankers who are going to be your Bankers to the issue and the disclosure of the same will be given in RHP.

2. Consent of the lenders- Whether this is also the requirement of ICDR PART-A (XI)(N) {i.e. Consent of the Directors, auditors, solicitors or advocates, merchant bankers to the issue, registrar to the issue, bankers to the issuer, lenders and experts}.

But more specifically if your company is availing consortium finance then the agreement must have a clause that the company will obtain prior consent of Bankers before the issue.

Here, lenders consent will be like a No Objection from their side.

Others views solicited.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 22 September 2010

Agree with Vivek. For lender it must be in the form of no objection and in case of Banker to the issue it must be in the form of consent to act as Banker.