Tata Play's confidentially filed IPO gets market regulator Sebi go-ahead

Following the issuance of the observation letter, Tata Play will now have to file an updated draft red herring prospectus (UDRHP-1) before it launches its IPO

The Securities and Exchange Board of India (Sebi) has given its go-ahead to Tata Play’s proposed public issue. The Tata group firm is the first company in India to file confidential papers with the markets regulator for an initial public offering (IPO).

Sebi on April 26 had issued its observation letter on the company’s pre-filed offer document. Tata Play could be the first company from the group to launch an IPO in 18 years.

According to market sources, the company, which is a joint venture between Tata Sons and The Walt Disney Company, is eyeing to raise around Rs 3,000 crore via the IPO, which can be a mix of fresh and secondary share sales.

Tata Motors subsidiary Tata Technologies, too, filed its draft red herring prospectus (DRHP) in March. The company is expected to receive a go-ahead soon from the markets regulator. Tata Technologies’ IPO is expected to be around Rs 4,000 crore.

Following the issuance of the observation letter, Tata Play will now have to file an updated draft red herring prospectus (UDRHP-1) before it launches the IPO.

The updated DRHP will have to incorporate the observations issued by Sebi and will be available to the public.

Under the so-called confidential filing or the pre-filing route, an unlisted company is allowed to keep its offer document private until it firms up its IPO plan.

According to the norms, the company will have to file an updated DRHP within 16 months from the regulatory approval, the validity of which is 18 months.

The direct-to-home platform pre-filed its DRHP confidentially with the Sebi on November 29, a month after the introduction of the confidential route.

Hospitality chain Oravel Stays (OYO) has also opted for the confidential route for filing fresh IPO papers, after Sebi returned its initial documents. The company submitted for pre-filing on March 31. 

Additionally, the markets regulator has approved the IPO plans of drone-maker IdeaForge. Sebi issued the observation letter for India's largest drone maker on April 13, giving way for its public issue comprising a fresh issue of equity shares worth Rs 300 crore and an offer for sale of 48,69,712 equity shares.