10.23Evaluate the promoter background
1What is it?
Research the promoters’ history, other businesses, legal cases and post-IPO holding.
2Why does it exist?
Honest, capable promoters with significant holding after the IPO are aligned with you.
3Practical use
RHP sections: "Our Promoters", "Outstanding Litigation", "Capital Structure". Red flags: serious criminal or regulatory cases, many related-party transactions, very low post-IPO holding.
4Quick revision
- Check track record and litigation.
- Post-IPO promoter holding matters.
5Knowledge check
Q1. Which section lists legal cases?Show answer
"Outstanding Litigation and Material Developments".
Q2. Why does post-IPO holding matter?Show answer
High holding aligns promoters with shareholders.
Q3. Name a promoter red flag.Show answer
Serious legal cases, related-party dealings, very low holding.