Kotak tells startups: Have thorough ‘health check-up’ earlier than IPOs

Kotak Mahindra Bank vice chairman and MD Uday Kotak on Wednesday cautioned startups to observe the regulation and conduct a “health check-up” whereas aggressively pushing their companies and preliminary public choices (IPOs).
While within the early levels, startups have the must be aggressive, being aggressive has “to be consistent with following the law and ensure you are within four corners of law”, Kotak mentioned whereas talking on the Institutional Investor Advisory Services’ (IiAS) convention on ‘The Start-up Boardroom: Building for the Future’. A number of latest age startup firms with hardly any observe document have lined up for IPOs to boost funds from the general public.
Kotak suggested startups to go for “health check-ups” earlier than elevating public funds. “Have a thorough health check-up of your firm in every which way by getting an independent governance expert, investment banker or a lawyer to do a top-to-bottom check-up of how ready you are for coming to the public markets. Pre-mature launches (of IPOs) run the risk of accidents along the way,” he mentioned.

“The Cinderella times won’t last forever, and we’re not far away from the clock striking midnight,” Kotak cautioned startups. IPOs of some startups have seen weak itemizing on inventory exchanges with a few of them now buying and selling at large low cost towards the difficulty costs.
According to Kotak, startups ought to make certain sustainable development in worth moderately than only a pop and a flat or a damaging pop on the level of itemizing. Compounded annual development over a protracted time period is what’s going to endear you to traders, notably from the start-up world, he mentioned. Kotak added that principles-based regulation has been misused by the system in lots of circumstances.