A Company Secretary (CS) professional is considered the pillar of the organisation, who plays a pivotal role in the day-to-day activities of a company. The Companies Act of 2013 defines a CS as a key managerial person (KMP) who ensures transparency, legal compliance, and efficient management of corporate affairs. From drafting resolutions and maintaining statutory records to advising on legal matters, the CS contributes significantly to the ethical and efficient functioning of a company.
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All these duties and responsibilities of a CS become even more when a business chooses to go public through an Initial Public Offering (IPO).
An IPO is a transformative process that involves offering shares of a private corporation to the public for the first time, thereby getting the company listed on a recognised stock exchange like the National Stock Exchange (NSE) or Bombay Stock Exchange (BSE). The process is highly regulated by authorities such as the Securities and Exchange Board of India (SEBI) and involves multiple legal and procedural steps.
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The duties of CS during an IPO can be classified into two phases.
Forming an IPO Committee: The Company Secretary facilitates the constitution of an IPO Committee, if required, to oversee and expedite key decisions related to the public offering process.
Ensuring regulatory standards: The company secretary ensures that the business meets the eligibility criteria and maintains the standards required for listing in an IPO, as prescribed under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Companies Act, 2013, the Securities Contracts (Regulation) Act, 1956, and SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
Setting timelines: The CS has to plan and set the proper timelines for taking each step of the IPO to ensure the proper and smooth flow.
Appointment of Advisors and Intermediaries: The CS assists the company in the appointment of important professionals to assist in listing, which includes Auditors, Book Running Lead Managers (BRLM), Independent Directors, Industry Experts, Legal Advisors, etc.
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Coordinating Internal and External Activities: The CS helps to coordinate all of the organisation’s internal and external activities by assisting and organising the Directors, BRLM, Accountants, Auditors, Registrars of Company (RoC), Shareholders, and other statutory bodies.
Documenting Board Meetings and Preparing Minutes: At every stage of the IPO process, the Company Secretary ensures thorough documentation of board meetings and prepares detailed minutes to maintain a clear and accurate record.
Corporate Governance Compliance: Chapter III, Regulation 6 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandates that every listed entity must appoint a qualified company secretary as the compliance officer responsible for ensuring regulatory compliance.
The CS ensures the company follows all mandatory corporate governance requirements, including proper board composition, functioning of board committees, presence of independent directors, audit committee roles, code of conduct, and disclosure of related party transactions.
Amendment of Memorandum and Articles of Association: In certain cases, the Memorandum of Association (MoA) and Articles of Association (AoA) must be amended to meet IPO requirements. The Company Secretary reviews these documents, identifies necessary changes, and facilitates the amendment process by coordinating board and shareholder meetings.
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Creating a Vigil Mechanism: The Company Secretary assists in drafting important policies like the vigil mechanism, insider trading rules, and disclosures to ensure they are followed as required by SEBI regulations.
Setting Up the Virtual Data Room : CS helps in facilitating the setup of the Virtual Data Room, ensuring all necessary documents, such as financial records, legal agreements, corporate approvals, and compliance reports, are accurately compiled and securely uploaded for access by regulators, advisors, and potential investors during the IPO process.
Accounting Standards Compliance: The CS verifies that the company complies with applicable accounting standards and that there have been no adverse remarks in the past five years.
Managing Payment of Deposits and Statutory Dues: CS monitors timely payment of dues to banks, financial institutions, Employees’ Provident Fund, deposits under Sections 58A and 58AA of the Companies Act, 1956, and other statutory obligations to avoid defaults.
Website Compliance: The company secretary ensures the company’s website is live and compliant at least one month before the IPO.
Risk Management: The company secretary ensures that proper risk assessment procedures are in place and that key risks are regularly communicated to the board for timely action.
Review and Finalisation of Key Agreements: The Company Secretary reviews and finalises agreements with the Registrar and Transfer Agent (RTA) and also reviews and provides inputs on other critical agreements such as the Offer Agreement, Monitoring Agency Agreement, Escrow Agreement, and Sponsor Bank Agreement
Drafting and Filing: The company secretary plays a key role in the drafting and filing of the IPO offer document. This includes preparing essential documents such as the Draft Red Herring Prospectus (DRHP), which outlines the company’s business, financials, and risks. The CS works closely with merchant bankers, auditors, and legal advisors to ensure the DRHP complies with SEBI regulations.
Once drafted, the CS oversees its filing with SEBI, obtains in-principle approval from stock exchanges, and ensures compliance with SEBI’s observations. After necessary revisions, the final Red Herring Prospectus (RHP) is prepared and issued. The CS also ensures that all necessary documents, including the final prospectus, are duly filed with the Registrar of Companies (ROC) as part of the IPO process.
Once the company completes its Initial Public Offering (IPO) and becomes listed on a stock exchange, the role of the company secretary becomes even more crucial. The CS acts as a key custodian of compliance, governance, and communication between the company, regulators, investors, and other stakeholders.
Timely and Accurate Regulatory Filings: Filing necessary details such as financial reports and disclosures with stock exchanges, SEBI, and investors on time, while ensuring the accuracy, authenticity, and completeness of all information submitted under the regulations.
Investor Grievance Monitoring and Redressal: Monitoring the designated email address of the grievance redressal division to ensure investor complaints are registered and addressed quickly.
Overseeing Committees: Once the company is listed, the CS oversees the functioning of different committees, including the Risk Management Committee, the Stakeholders Relationship Committee, CSR Committees etc.
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The company secretary plays an essential role in maintaining the company’s compliance with regulatory requirements and corporate governance standards post-IPO. By ensuring timely and accurate filings, managing investor communications, and addressing grievances efficiently, the CS helps sustain transparency and accountability. Their diligent efforts build investor confidence and contribute significantly to the company’s long-term success in the public market.
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