Document Type : Science - Research (Islamic Capital Market)

Authors

• Ali Amirshahi ¹
• Mohammad Tohidi ²
• Mahdi Jamjah ³

¹ Department of Finance and Banking, Faculty of Management and Accounting, Allameh Tabataba’i University, Tehran, Iran

² Faculty Member, Department of Financial Management, Faculty of Islamic Studies and Management, Imam Sadiq University, Tehran, Iran

³ .Department of finance, Imam Sadiq(PBUH) University, Tehran, Iran

Abstract

Special Purpose Acquisition Companies (SPACs) have recently emerged as a fast, flexible, and cost-effective alternative to traditional initial public offerings (IPOs) in international capital markets. These shell companies are established with the aim of raising public funds and subsequently merging with or acquiring private companies. The development of SPACs in Iran's capital market could facilitate access to financial resources for non-listed companies, deepen the market, enhance transparency, and strengthen production financing. However, certain characteristics of SPACs—such as the time gap between capital raising and deal execution, the absence of a target company at the time of the IPO, and the intermediary role of the SPAC in the acquisition process—raise questions regarding their compatibility with the principles of Islamic jurisprudence, particularly within the framework of the capital market of the Islamic Republic of Iran. This study aims to assess the feasibility of implementing SPACs from a Shariah perspective in Iran’s capital market, using a qualitative, multi-stage approach. First, primary Islamic jurisprudential sources were analyzed to extract relevant Shariah criteria. These criteria were then reviewed and finalized through focus group discussions. In the next phase, field data were collected via a specialized questionnaire administered to 26 experts in Islamic financial jurisprudence and analyzed using statistical methods. The findings indicate that, provided Shariah principles are observed, the implementation of SPACs in Iran’s capital market is feasible. Moreover, a majority of experts affirmed the legitimacy of SPACs without the need for fundamental structural changes. Therefore, SPACs have the potential to become a legitimate and effective instrument in Iran's capital market.

Keywords

• Special Purpose Acquisition Companies (SPACs)
• Jurisprudential Feasibility
• Public Share Offering
• Private Companies
• Capital Market

Main Subjects

• Islamic Capital Market