Taking a company public is one of the most heavily certified events in Indian corporate life. Before a single share is offered, and for every quarter after listing, a stream of professional certificates must accompany the offer document and the company’s filings — on net worth, promoters’ contribution, capital build-up, deployment of funds, tax benefits, corporate governance and more. These certificates, issued by a peer-reviewed Chartered Accountant or a Practising Company Secretary, are what give SEBI, the stock exchanges, the merchant bankers and investors confidence that the disclosures are true.
This guide, written from the perspective of a practicing Chartered Accountant, explains the certificates relating to an Initial Public Offer (IPO) and ongoing compliances under the SEBI (ICDR) Regulations, 2018 and the SEBI (LODR) Regulations, 2015 — what they are, who can issue them, the governing law, when each is required, the documents and information needed, the issuing process, an illustrative specimen, verification, common reasons for rejection, validity, professional responsibilities, penalties, and 70+ frequently asked questions. It is meant for startups planning to list, company directors, CFOs, merchant bankers, auditors, company secretaries and tax consultants.
What Are ICDR / LODR Certificates?
ICDR / LODR certificates are professional certificates and reports required at two stages of a company’s life in the capital market. At the IPO stage, the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 require various certifications to support the disclosures in the draft red herring prospectus (DRHP) and prospectus. After listing, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 require continuing certificates on governance, share capital and use of funds.
These are not a single document but a family of certificates. Common examples include the net worth certificate of the company and promoters, the restated financial information reported on by the auditor, the capital build-up (share capital history) certificate, the minimum promoters’ contribution and lock-in certificate, the statement of tax benefits, the deployment / utilisation of funds certificate, the corporate governance compliance certificate, and the reconciliation of share capital audit report.
In short: an IPO and a listed life are built on a foundation of independent professional certificates, each addressing a specific disclosure that regulators and investors rely on.
Purpose of These Certificates
- Reliable disclosure — to give investors accurate, independently verified information in the offer document.
- Regulatory comfort — to satisfy SEBI and the stock exchanges that ICDR/LODR conditions are met.
- Eligibility confirmation — to confirm net worth, profitability and other entry norms for the issue.
- Promoter accountability — to verify minimum promoters’ contribution and lock-in.
- Use-of-funds tracking — to confirm how issue proceeds are deployed against the stated objects.
- Ongoing governance — to certify continuing compliance after listing.
Why Are These Certificates Required?
A public issue raises money from ordinary investors, so the law builds in heavy verification. These certificates are required because:
- The ICDR Regulations make specific certifications a condition for filing the offer document.
- The Companies Act imposes prospectus disclosure and liability provisions (Sections 26, 34, 35).
- The LODR Regulations require continuing certificates on governance, share capital and fund use.
- Investors and merchant bankers (lead managers) rely on them for due diligence.
- They reduce misstatement risk and the chance of regulatory action.
- The stock exchanges and SEBI need independent assurance before and after listing.
Who Can Issue These Certificates?
This is a shared professional space. Financial certificates come from a Chartered Accountant; secretarial and governance certificates come from a Practising Company Secretary; both must often hold special eligibility such as peer review.
Chartered Accountant (CA) — including the Statutory Auditor
A Chartered Accountant — typically the company’s statutory auditor holding a valid peer review certificate — issues the financial certifications: restated financial information, net worth, capital build-up, promoters’ contribution, statement of tax benefits, deployment of funds, and accounting-ratio certificates. SEBI requires the auditor reporting on offer-document financials to be peer reviewed. These certificates carry a UDIN.
Practising Company Secretary (PCS)
A PCS issues secretarial and governance certificates — the Reconciliation of Share Capital Audit (quarterly), the Annual Secretarial Compliance Report under LODR Regulation 24A, certificates under Regulation 40(9) on share transfers, and the certificate under Regulation 7(3). The corporate governance compliance certificate under LODR Regulation 27(2) may be issued by a PCS or a CA.
Cost Accountant (CMA)
A Cost Accountant’s role in IPO/listing certification is limited; they are not the issuer of the core ICDR/LODR financial or secretarial certificates, though they may support cost-related disclosures in specific industries.
Merchant Banker (Lead Manager)
The merchant banker is not a “certifier” in the professional sense but conducts due diligence, files the offer document, and gives its own due-diligence certificate to SEBI, relying on the CA and PCS certificates.
Monitoring Agency
For larger issues, a credit rating agency registered with SEBI acts as the monitoring agency for use of issue proceeds, complementing the CA’s deployment certificate.
Legal Provisions and Applicable Laws
SEBI (ICDR) Regulations, 2018
The core code for public issues. It prescribes eligibility norms, minimum promoters’ contribution and lock-in, disclosures in the DRHP/prospectus, restated financial information, and the certifications that must support them. Schedules to the ICDR set out the form and content of the financial disclosures the auditor reports on.
SEBI (LODR) Regulations, 2015
- Regulation 7(3) — compliance certificate on share transfer / RTA systems.
- Regulation 24A — Annual Secretarial Compliance Report by a PCS.
- Regulation 27(2) — quarterly corporate governance compliance report.
- Regulation 32 — statement of deviation in use of issue proceeds.
- Regulation 40(9) — certificate on share transfer facility.
- Regulation 76 (D&P Regulations) — Reconciliation of Share Capital Audit.
Companies Act, 2013
Sections 26, 32, 33 (prospectus and red herring prospectus), Section 35 (civil liability for misstatement in prospectus), and provisions on allotment and share capital, govern the corporate side of the issue.
SEBI Act, 1992 & SCRA, 1956
The SEBI Act empowers the regulator over the securities market, and the Securities Contracts (Regulation) Act and rules govern listing and continuous listing requirements.
FEMA & RBI Guidelines
Where foreign investors, NRIs or FPIs participate, the FEMA (Non-debt Instruments) Rules and RBI pricing and reporting requirements apply to the issue.
Income-tax Act & GST
The statement of tax benefits in the offer document is based on the Income-tax Act and GST law, certified by the auditor, describing the tax benefits available to the company and its shareholders.
When Is Each Certificate Required?
| Situation | Certificate | Required? |
|---|---|---|
| Filing the DRHP / prospectus for an IPO | Restated financial information (auditor’s report) | Yes |
| Confirming issue eligibility & net worth | Net worth certificate (CA) | Yes |
| Disclosing share capital history | Capital build-up certificate (CA) | Yes |
| Minimum promoters’ contribution & lock-in | Promoters’ contribution certificate (CA) | Yes |
| Tax benefits disclosure in offer document | Statement of tax benefits (CA) | Yes |
| Use of issue proceeds after listing | Deployment / utilisation certificate (CA) | Yes |
| Quarterly share capital reconciliation | Reconciliation of Share Capital Audit (PCS) | Yes |
| Annual secretarial compliance (listed) | Secretarial Compliance Report — Reg 24A (PCS) | Yes |
| Quarterly corporate governance (listed) | CG compliance certificate — Reg 27(2) | Yes |
Who Needs These Certificates?
- Companies planning an IPO — to file the DRHP and prospectus with SEBI and the exchanges.
- Startups seeking to list (including on the SME platform) once eligibility norms are met.
- Promoters — for minimum contribution, lock-in and net worth certification.
- Listed companies — for ongoing LODR certificates every quarter and year.
- Company directors and CFOs — responsible for the disclosures these certificates support.
- Merchant bankers (lead managers) — who rely on them for due diligence.
- Companies doing rights issues, FPOs, QIPs or preferential allotments — which have their own ICDR certifications.
Individuals, salaried persons and NRIs are typically investors here rather than certificate-holders, though NRI/FPI participation brings in FEMA certification, and tax consultants assist with the tax-benefits statement.
Documents Required
- Audited and, where applicable, restated financial statements for the periods required by ICDR.
- Memorandum and Articles of Association and the certificate of incorporation.
- Complete share capital history — allotments, bonus, splits, buy-backs, with board/shareholder approvals.
- Register of members, register of allotments and the cap table.
- Promoters’ shareholding records and evidence of the source of promoters’ contribution.
- Lock-in details and depository (NSDL/CDSL) records.
- Object of the issue, means of finance and working capital computations.
- Bank statements and records evidencing deployment of funds.
- Tax records supporting the statement of tax benefits.
- Board and committee minutes, related-party transaction details, and corporate governance records.
Information Required by the Chartered Accountant
- The type of issue (IPO, FPO, rights, QIP, preferential) and the platform (Main Board / SME).
- The eligibility route (profitability test or QIB / book-building route under ICDR).
- The full history of share capital and the price/consideration for each allotment.
- The promoters and promoter group and the basis of their contribution and lock-in.
- The objects of the issue and the planned deployment schedule.
- Details for the statement of tax benefits under current tax law.
- Any related-party transactions, contingent liabilities and qualifications in the accounts.
- Whether the auditor holds a valid peer review certificate.
- A signed management representation on the completeness and accuracy of records.
Process of Issuing the Certificate
- Appointment — a peer-reviewed CA (and PCS for secretarial items) is engaged for the issue.
- Data gathering — financials, share capital history, promoter and deployment records are collected.
- Restatement — financial information is restated as required by ICDR, with adjustments and regroupings.
- Verification — each disclosure (net worth, capital build-up, promoters’ contribution) is independently checked.
- Cross-checks — figures are reconciled with audited accounts, depository and statutory records.
- Drafting with the lead manager — certificates are aligned with the DRHP disclosures.
- Management representation — a representation letter is obtained from the company.
- UDIN & signing — certificates are signed, UDIN generated, and dated.
- Filing — they are submitted with the offer document to SEBI and the exchanges.
- Post-listing certificates — LODR certificates are then issued each quarter and year as due.
Sample Format (Illustrative Specimen)
Below is an illustrative specimen of a net worth certificate of the kind issued for an offer document. It is for understanding only; the actual certificates must follow the formats agreed with the lead manager and the ICDR/LODR requirements.
Certificate of Net Worth for the Proposed Initial Public Offer
To,
The Board of Directors, [Name of the Company]
and [Name of the Book Running Lead Manager]We, the statutory auditors of [Name of the Company] (CIN: [____]), holding a valid peer review certificate, have examined the books of account and relevant records of the Company in connection with its proposed Initial Public Offer.
Based on our examination, we certify that the net worth of the Company as at 31st March 20XX, computed as the aggregate of paid-up share capital and reserves and surplus (excluding revaluation reserves), as reduced by miscellaneous expenditure not written off and accumulated losses, is ₹[amount], as detailed in the annexure to this certificate.
This certificate is issued at the request of the Company for inclusion in the Draft Red Herring Prospectus / Red Herring Prospectus and for submission to SEBI and the Stock Exchanges, and should not be used for any other purpose.
Place: [City] Date: [DD/MM/YYYY]
For [Firm Name], Chartered Accountants FRN: [____] Peer Review Cert. No.: [____]
[CA Name], Partner Membership No.: [____] UDIN: [____]Note: This is an illustrative specimen for educational purposes only and is not a substitute for the actual certificate formats required under the ICDR/LODR Regulations and agreed with the lead manager.
How the CA Verifies the Information
- Examining audited accounts — tracing every certified figure to the audited financial statements.
- Restating financials — applying ICDR adjustments, regroupings and accounting-policy alignment.
- Tracing share capital history — verifying each allotment against board/shareholder approvals and filings.
- Checking promoters’ contribution — confirming amount, source, eligibility and lock-in.
- Reconciling with depositories — matching shareholding with NSDL/CDSL and the register of members.
- Verifying deployment — vouching use of issue proceeds against the stated objects and bank records.
- Reviewing tax positions — supporting the statement of tax benefits with current law.
- Obtaining representations — a management representation letter on completeness and accuracy.
Common Reasons for Rejection or SEBI Observations
- Auditor without a valid peer review certificate issuing the offer-document financials.
- Restated financials not compliant with ICDR requirements or with audit qualifications unresolved.
- Gaps in share capital history or unexplained allotments and pricing.
- Shortfall in minimum promoters’ contribution or lock-in not correctly established.
- Inconsistencies between certificates, the DRHP and statutory records.
- Inadequate deployment evidence for use of issue proceeds.
- Missing UDIN or certificates not in the agreed format.
- Late or incomplete LODR filings after listing, attracting exchange penalties.
Validity Period
Most IPO certificates are tied to the offer document and a specific cut-off date. Restated financial information covers the periods prescribed by ICDR and must be updated if the issue is delayed beyond the permitted gap between the financials and the issue. Net worth, capital build-up and promoters’ contribution certificates are issued as at a stated date and may need refreshing if circumstances change before listing. LODR certificates are periodic — quarterly (corporate governance, share capital reconciliation) and annual (secretarial compliance) — and must be issued afresh each period. Treat each certificate as valid only for the issue, date and period for which it is given.
Difference Between Related Certificates
| Certificate | What It Confirms | Issuer |
|---|---|---|
| Restated Financial Information | ICDR-compliant restated accounts | Peer-reviewed CA (auditor) |
| Net Worth Certificate | Net worth on a stated date | Chartered Accountant |
| Capital Build-up Certificate | History of share capital | Chartered Accountant |
| Promoters’ Contribution Certificate | Minimum contribution & lock-in | Chartered Accountant |
| Statement of Tax Benefits | Tax benefits to company & investors | Chartered Accountant |
| Reconciliation of Share Capital Audit | Share capital vs depository records | Practising Company Secretary |
| Secretarial Compliance Report (24A) | Annual LODR/SEBI compliance | Practising Company Secretary |
ICDR Certificates vs LODR Certificates
| Basis | ICDR Certificates | LODR Certificates |
|---|---|---|
| Stage | At the time of the public issue | Continuing, after listing |
| Focus | Offer-document disclosures | Governance, share capital, fund use |
| Frequency | One-time for the issue | Quarterly / annual |
CA Certificate vs PCS Certificate
| Basis | CA Certificate | PCS Certificate |
|---|---|---|
| Domain | Financial & tax certifications | Secretarial & governance certifications |
| Examples | Net worth, restated accounts | Reg 24A, share capital reconciliation |
Net Worth vs Working Capital Certificate
| Basis | Net Worth Certificate | Working Capital Certificate |
|---|---|---|
| Measures | Total assets minus total liabilities | Current assets minus current liabilities |
| Use in IPO | Eligibility & financial strength | Working-capital object of the issue |
Professional Responsibilities of the Chartered Accountant
- Peer review & eligibility — hold a valid peer review certificate before certifying offer-document financials.
- Independence — certify objectively, conscious that public investors rely on the disclosures.
- Due diligence — verify each figure against audited accounts and statutory records, not management assertions alone.
- UDIN compliance — generate and quote a valid UDIN on every certificate.
- Documentation — retain detailed working papers supporting each certificate.
- Confidentiality — handle price-sensitive information per the ICAI Code of Ethics and insider-trading norms.
- Truthful reporting — never certify a disclosure that is incomplete or misleading.
Penalty for Misrepresentation
⚠️ Important: Misstatements connected with a public issue carry serious consequences for the company, its directors, and the certifying professionals.
- Section 35 of the Companies Act — civil liability for misstatement in a prospectus, and Section 34 — criminal liability.
- SEBI Act, 1992 — penalties, debarment and other directions by SEBI for misleading disclosures or fraud.
- LODR penalties — fines and actions by the stock exchanges for non-compliance and late filings.
- Section 271J of the Income-tax Act — penalty of ₹10,000 per incorrect report or certificate where income-tax certification is involved.
- ICAI / ICSI disciplinary action against the CA or PCS for professional misconduct.
- Investor claims for losses arising from untrue statements in the offer document.
Because these certificates feed directly into investor decisions, professionals certify only after rigorous, well-documented verification.
Frequently Asked Questions
1. What are ICDR and LODR certificates?
They are professional certificates required for a public issue and for life as a listed company. ICDR certificates support the IPO offer document under the SEBI (ICDR) Regulations, 2018, while LODR certificates cover continuing governance, share capital and fund-use compliance under the SEBI (LODR) Regulations, 2015.
2. Who can issue these certificates?
A peer-reviewed Chartered Accountant (usually the statutory auditor) issues the financial certificates, and a Practising Company Secretary issues the secretarial and governance certificates. Some governance certificates may be issued by either. Cost Accountants do not issue the core ICDR/LODR certificates.
3. Is CA certification mandatory for an IPO?
Yes. The restated financial information and several financial certificates in the offer document must be issued by a peer-reviewed Chartered Accountant. Without them, the DRHP cannot be filed with SEBI.
4. What is a peer review certificate and why does it matter?
A peer review certificate is issued by ICAI’s Peer Review Board confirming that an audit firm’s processes meet quality standards. SEBI requires the auditor reporting on offer-document financials to hold a valid peer review certificate.
5. What is restated financial information?
It is the company’s historical financial statements re-cast for the periods required by ICDR, with consistent accounting policies, adjustments for prior-period items and regroupings, reported on by the peer-reviewed auditor for inclusion in the offer document.
6. What is the minimum promoters’ contribution?
Under ICDR, promoters must generally contribute a minimum percentage of the post-issue capital, which is then locked in for a prescribed period. A CA certifies the amount, source and eligibility of this contribution.
7. What is a capital build-up certificate?
It is a certificate giving the complete history of the company’s share capital — every allotment, bonus, split, buy-back and the consideration for each — verified against board and shareholder approvals and statutory filings.
8. What is the statement of tax benefits?
It is a statement in the offer document, certified by the auditor, describing the tax benefits available to the company and its shareholders under the Income-tax Act and GST law, with appropriate assumptions and limitations.
9. What is the deployment of funds certificate?
It certifies how the money raised in the issue has been used against the stated objects of the issue. It supports the statement of deviation under LODR Regulation 32 and is checked against bank records.
10. What is the Reconciliation of Share Capital Audit?
It is a quarterly audit by a Practising Company Secretary reconciling the company’s issued and listed capital with the holdings recorded at NSDL and CDSL, to ensure there is no excess or unaccounted capital.
11. What is the Annual Secretarial Compliance Report?
Under LODR Regulation 24A, a listed company must obtain an annual report from a Practising Company Secretary confirming compliance with SEBI regulations and circulars, and submit it to the stock exchanges.
12. How much do IPO certificates cost?
Fees depend on the size and complexity of the issue, the number of periods to be restated and the certifications involved. IPO assurance work is substantial and priced accordingly; ICAI does not fix rates. The scope and fee are agreed in the engagement letter.
13. Can these certificates be issued online?
Much of the work is done digitally and filings are electronic, but the CA and PCS must verify genuine records and sign the certificates with a UDIN. There is no valid certificate without real verification.
14. What is the validity of IPO certificates?
They are tied to the offer document and a cut-off date. If the issue is delayed beyond the permitted gap, financials and certificates must be refreshed. LODR certificates are periodic and issued each quarter or year.
15. What is a UDIN and is it needed here?
UDIN (Unique Document Identification Number) is generated from the ICAI portal for every certificate a CA signs (ICSI has a similar system for PCS). It allows verification and prevents forgery, and is required on these certificates.
16. What is a monitoring agency in an IPO?
For issues above a prescribed size, a SEBI-registered credit rating agency is appointed as a monitoring agency to oversee the use of issue proceeds and report on deviations, complementing the CA’s deployment certificate.
17. Can a startup go for an IPO?
Yes, if it meets the ICDR eligibility norms, either through the profitability route or the alternative QIB book-building route, or by listing on the SME platform which has its own criteria. The same family of certificates applies.
18. What is the difference between Main Board and SME IPO certification?
The core certificates are similar, but SME IPOs have different eligibility thresholds and a lighter disclosure regime in some respects. The auditor and PCS still issue net worth, restated financials, promoters’ contribution and related certificates.
19. Who relies on these certificates?
SEBI, the stock exchanges, the merchant bankers (lead managers), the monitoring agency and ultimately the investing public rely on them to make and approve the issue.
20. What is the statement of deviation under Regulation 32?
Under LODR Regulation 32, a listed company must periodically report any deviation in the use of issue proceeds from the stated objects, supported by the monitoring agency report and the CA’s deployment certificate.
21. What records does the CA need?
Audited and restated financials, the full share capital history with approvals, promoter shareholding and source records, depository data, deployment evidence, tax records and corporate governance documents.
22. Can a CA without peer review issue offer-document financials?
No. SEBI requires the auditor reporting on offer-document financials to hold a valid peer review certificate. A non-peer-reviewed firm cannot issue these.
23. What is corporate governance certification under Regulation 27(2)?
Listed companies file a quarterly corporate governance compliance report, and an auditor or PCS certifies compliance with the governance provisions of the LODR Regulations, including board composition and committees.
24. What is the penalty for a misstatement in the prospectus?
Section 34 of the Companies Act provides criminal liability and Section 35 civil liability for untrue statements in a prospectus. SEBI can also impose penalties and debarment, and professionals face disciplinary action.
25. Can SEBI reject or return a DRHP?
Yes. SEBI issues observations on the DRHP and can require changes or refuse to process it if disclosures or certifications are deficient, including issues with restated financials or promoters’ contribution.
26. Are these certificates needed for a rights issue or QIP?
Yes. Rights issues, FPOs, QIPs and preferential allotments have their own certifications under ICDR, including restated/financial information, pricing and compliance certificates, though the requirements differ from a full IPO.
27. How does FEMA affect an IPO?
Where NRIs, FPIs or other non-residents invest, the FEMA Non-debt Instruments Rules and RBI pricing and reporting requirements apply, and related certifications and filings are needed.
28. What is the lock-in period for promoters?
Promoters’ minimum contribution is locked in for a prescribed period after listing, with the balance of their holding locked in for a shorter period. The exact periods are set by ICDR and certified by the CA.
29. Can a CA refuse to issue an IPO certificate?
Yes. If records are inadequate, disclosures are misleading, or eligibility is not met, the professional must decline or qualify rather than issue a certificate that investors would rely on wrongly.
30. How long does IPO certification take?
Restatement and certification is a multi-week to multi-month exercise depending on the company’s size, the periods involved and the readiness of records. It runs in parallel with the lead manager’s due diligence.
31. What is a cap table and why does it matter?
A capitalisation table records who owns how many shares and at what price across funding rounds. It underpins the capital build-up and promoters’ contribution certificates and must reconcile with statutory records.
32. Are LODR certificates needed every quarter?
Several are. The corporate governance report and share capital reconciliation are quarterly, while the secretarial compliance report is annual. Listed companies must track these deadlines carefully.
33. What happens if a listed company misses a LODR filing?
The stock exchanges levy fines under the SEBI SOP for non-compliance, and persistent default can lead to freezing of promoter holdings and other action. Timely certification avoids this.
34. What is a management representation letter here?
It is a written confirmation from the company’s management that the records and information given to the CA and PCS are complete and accurate. It supports but does not replace the professionals’ own verification.
35. Do these certificates cover related-party transactions?
Related-party transactions are disclosed in the restated financials and the offer document and are scrutinised. LODR also imposes ongoing approval and disclosure requirements that are certified after listing.
36. Who appoints the certifying professionals?
The company, in consultation with the lead manager, engages the peer-reviewed auditor and a Practising Company Secretary for the respective certifications.
37. Is the statement of tax benefits a guarantee of tax savings?
No. It describes the tax benefits available under current law, subject to assumptions and conditions. It is not a promise that any particular benefit will be realised by an investor.
38. How are these certificates verified for authenticity?
Through the UDIN on the ICAI/ICSI portals, the professional’s membership and firm details, the peer review certificate number, and cross-checking with the filed offer document and exchange records.
39. Can certificates be revised after filing the DRHP?
Yes. As the issue progresses and in response to SEBI observations, certificates and the offer document are updated, with fresh dates and UDINs. The final versions accompany the prospectus.
40. What records should the company keep after the IPO?
All certificates, the restated financials and working papers, share capital and deployment records, monitoring agency reports and LODR filings, for the period required by law and for any future scrutiny.
41. Is a Company Secretary mandatory for listing compliance?
Listed companies must comply with LODR provisions that require a Practising Company Secretary’s certificates, such as the annual secretarial compliance report and share capital reconciliation. A whole-time company secretary is also required.
42. What is the first step for IPO certification?
Engage a peer-reviewed Chartered Accountant and a Practising Company Secretary early, organise the financials, share capital history and promoter records, and begin restatement and verification in parallel with the lead manager’s due diligence.
People Also Ask
What is ICDR in simple words?
ICDR stands for Issue of Capital and Disclosure Requirements. It is the SEBI rulebook that tells companies how to make a public issue and what to disclose to investors.
What is LODR in simple words?
LODR stands for Listing Obligations and Disclosure Requirements. It is the SEBI rulebook that a company must follow continuously after its shares are listed.
What certificates are needed for an IPO?
Key ones include restated financial information, net worth, capital build-up, promoters’ contribution and lock-in, statement of tax benefits, and deployment of funds certificates.
Who prepares restated financials for an IPO?
The company’s statutory auditor, who must hold a valid peer review certificate, prepares and reports on the restated financial information for the offer document.
What is a DRHP?
A Draft Red Herring Prospectus is the preliminary offer document filed with SEBI for a book-built IPO, containing disclosures and the supporting professional certificates.
What is the role of a merchant banker in an IPO?
The merchant banker, or book running lead manager, conducts due diligence, drafts and files the offer document, and manages the issue, relying on the CA and PCS certificates.
What is minimum promoters’ contribution lock-in?
Promoters must hold a minimum share of post-issue capital that is locked in for a set period after listing, certified by a CA, to align their interest with investors.
What is the eligibility for an IPO under ICDR?
A company qualifies either through profitability and net-worth tests or through an alternative book-building route with a high share to qualified institutional buyers, as specified in ICDR.
What is a monitoring agency report?
For larger issues, a SEBI-registered credit rating agency monitors how IPO funds are used and reports on any deviation from the stated objects.
What is Regulation 24A of LODR?
It requires a listed company to obtain an annual secretarial compliance report from a Practising Company Secretary and file it with the stock exchanges.
What is share capital reconciliation audit?
It is a quarterly audit by a PCS that reconciles the company’s listed and issued capital with depository records at NSDL and CDSL.
Can an SME list on the stock exchange?
Yes. Small and medium enterprises can list on the dedicated SME platforms of the exchanges, meeting their specific eligibility and disclosure norms.
What is the statement of tax benefits in an IPO?
It is an auditor-certified description of the tax benefits available to the company and its shareholders under current tax law, with assumptions and limitations.
What is a red herring prospectus?
It is the offer document used in a book-built issue that does not state the final price or number of shares, which are determined through the book-building process.
Are IPO certificates one-time?
ICDR certificates are largely for the issue, but must be refreshed if the issue is delayed. LODR certificates continue quarterly and annually after listing.
What is the deployment of issue proceeds?
It is the actual use of money raised in the issue, which must match the objects stated in the prospectus and is certified and monitored after listing.
Who signs the corporate governance report?
The compliance officer files it, and an auditor or Practising Company Secretary certifies compliance with the governance provisions of LODR.
Can promoters sell shares immediately after listing?
No. Promoters’ shares are subject to lock-in for prescribed periods, certified at the IPO stage, restricting sale immediately after listing.
What is the difference between IPO and FPO?
An IPO is a company’s first public issue; a Follow-on Public Offer is a further issue by an already listed company. Both require ICDR certifications.
Is a cost accountant involved in IPOs?
Cost accountants have a limited role; the core ICDR/LODR certificates come from a Chartered Accountant and a Practising Company Secretary.
What is insider trading compliance for certifiers?
Professionals handling price-sensitive information must follow SEBI’s insider trading regulations and maintain strict confidentiality during the issue.
What is a compliance officer in a listed company?
Usually the company secretary, who ensures LODR compliance, coordinates filings, and works with the PCS and auditor on certifications.
How are IPO proceeds protected from misuse?
Through the stated objects, the monitoring agency, the CA’s deployment certificate, and the LODR statement of deviation, which together track fund use.
Do NRIs need special compliance to invest in an IPO?
NRI and foreign investment in an issue is subject to FEMA rules and RBI reporting, with sectoral caps and pricing norms applying.
What is the role of stock exchanges in listing?
The exchanges grant in-principle approval and final listing, monitor LODR compliance, and levy penalties for defaults after listing.
What is an offer for sale?
An offer for sale is where existing shareholders sell their shares in the issue, as distinct from a fresh issue of new shares by the company.
Can a company withdraw an IPO after filing?
Yes, a company can defer or withdraw an issue subject to SEBI and exchange procedures and market conditions, even after filing the DRHP.
What is the cooling-off for restated financials?
There is a maximum permitted gap between the date of the latest restated financials and the issue; beyond it, the financials must be updated.
Who is liable for a false prospectus?
The company, its directors, promoters and persons who authorised the issue can be liable under the Companies Act and SEBI Act, and certifying professionals for their reports.
Where can I check the current ICDR/LODR requirements?
Refer to the SEBI website for the ICDR and LODR Regulations and circulars, the stock exchange portals, and consult a CA and Practising Company Secretary, as the rules are amended frequently.
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External Authority References
Conclusion
An IPO and a listed life rest on a carefully assembled set of professional certificates. Under the ICDR Regulations, a peer-reviewed Chartered Accountant restates the financials and certifies net worth, capital build-up, promoters’ contribution, tax benefits and the use of funds; under the LODR Regulations, a Practising Company Secretary and the auditor keep the company compliant quarter after quarter. Together with the merchant banker’s due diligence and the monitoring agency’s oversight, these certificates protect investors and the integrity of the market.
For a company heading to the market, the practical advice is to start early, appoint peer-reviewed and experienced professionals, get the share capital history and promoter records in order, and treat each certificate as a serious assurance rather than a formality. The cost of a flawed certificate — SEBI observations, delays, penalties and liability — is far higher than the cost of doing it right.
If your company is planning an IPO or needs ongoing ICDR/LODR certification, our team at MicroAdvisor can assist with the financial certifications, restatement support and compliance coordination required.
Disclaimer: The issuance of any certificate in relation to a public issue or listing compliance is entirely subject to the verification of records provided by the company and the professional judgment of the Chartered Accountant or Practising Company Secretary. MicroAdvisor and the issuing professional do not guarantee acceptance of any certificate or offer document by SEBI, the stock exchanges, or any other authority, nor the success of any issue. This article is for educational purposes only and does not constitute legal, financial, investment or professional advice, and is not an offer or invitation to invest. All laws, regulations and requirements mentioned — including the SEBI ICDR and LODR Regulations, the Companies Act, FEMA and related provisions — are subject to frequent amendment; readers must verify the current provisions with the relevant authorities or a qualified professional before acting.
Planning an IPO or Need ICDR / LODR Certification?
Our team of qualified Chartered Accountants can assist with restated financial information, net worth and promoters’ contribution certificates, the statement of tax benefits, deployment-of-funds certification, and ongoing LODR compliance support — issued with UDIN by peer-reviewed professionals.
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