Schemes and the Amendment to the Takeover Regulations

 

Schemes of arrangement have been a favoured route for corporates to acquire shares of listed companies, given the many obvious pros of acquisitions undertaken through a court/ National Company Law Tribunal (NCLT) based scheme of arrangement. Schemes have also been used to undertake group level restructurings, a consequence of which could be the indirect transfer of shares of a listed company from one group company to another.

One of the biggest advantages of acquiring shares in, and/or control over, a listed company pursuant to a scheme of arrangement is that such an acquisition is exempt from the requirements of making a mandatory open offer under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Takeover Regulations), subject to certain conditions being met. Continue Reading Schemes and the Amendment to the Takeover Regulations: A Step Backwards?

Private Equity Blog - Control Deals Acquisition

Private equity (PE) investors have traditionally invested in the Indian marketplace as ‘financial investors’, acquiring a minority stake in their target with negotiated contractual rights to oversee their financial investments.

The past few years have borne witness to the trend of acquiring “controlling stakes” in the target. Data gathered from public sources suggest that the total value of control deals in India went up from USD 4.8 billion in 2017 to USD 5.9 billion in 2018. Continue Reading Is Private Equity the New ‘Strategic’? Control Acquisitions are Here to Stay!

Foreign Portfolio Investor - Corporate Debt - Voluntary Retention Route

As the Indian economy has grown over the years, so have the means of raising foreign debt by Indian companies. What began with limited investment channels for foreign banks and certain qualified institutional investors, has now flourished into a robust foreign debt investment market. Based on the commercial considerations driving a deal, Indian corporates can now raise ECBs under multiple tracks, issue various kinds of rupee denominated bonds, or avail of monies through fund structures such as alternative investment funds (AIFs) and real estate investment trusts (REITs).

Added to this mix is the foreign portfolio investment (FPI) route. What sets FPI apart is the degree of commercial flexibility it accords to investors and companies. For example, end-use and pricing norms applicable to FPI investments are relatively relaxed. Because of this, FPI is often the preferred option for raising debt, particularly short-term debt and working capital funding requirements.[1] Continue Reading Investment through the Voluntary Retention Route: Fresh Push for FPI in Corporate Debt?

RBI Circular - Insolvency and Bankruptcy Blog

The Supreme Court’s judgment in Dharani Sugars and Chemicals Limited vs. Union of India is examined herein.

The Supreme Court in Dharani Sugars and Chemicals Limited vs. Union of India & Others (Dharani Sugars) has struck down the circular dated February 12, 2018, containing the revised framework for resolution of stressed assets (RBI Circular) issued by the Reserve Bank of India (RBI) on the ground of it being ultra vires Section 35AA of the Banking Regulation Act, 1949 (Banking Regulation Act).

Section 35AA was introduced by Parliament in 2017 to confer power on Central Government to authorise the RBI to give directions to any bank or banks to initiate an insolvency resolution process under the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC) in respect of ‘a default’. The RBI Circular was challenged, inter alia, on the basis that Section 35AA does not empower the RBI to issue directions for reference to the IBC of all cases without considering specific defaults.

Continue Reading Dharani Sugars v. Union of India: RBI’s Regulatory Powers Re-affirmed by the Supreme Court

stamp Act amendments 2019

The key amendments that the Finance Act, 2019 proposes to the Indian Stamp Act, 1899 have been examined in Decoding the Amendment to the Indian Stamp Act, 1899 for Debentures – Part I. The impact of the amendments on debentures have also been analysed against the prevailing stamping arrangement for debentures.

This second part deals with the interplay between the definitions of ‘debentures’ and ‘securities’ under the Amendment, and issues relating to the implementation of the Centralised Collection Mechanism (CCM). Continue Reading Decoding the Amendments to the Indian Stamp Act, 1899, for Debentures – Part II

Amendments to the Indian Stamp Act, 1899 for Debentures

 

The Finance Act, 2019[1] (Amendment) proposes to make some significant amendments to the Indian Stamp Act, 1899 (Act). The primary objective of the Amendment is to set up a zero-evasion centralised collection mechanism under which stamp duty is collected through one agency, at one place and on one instrument for securities market transactions.

It also seeks to standardise the stamp duty payable on issuance, sale and transfer of securities market instruments. It does so by removing multiple instances of stamp duty, waiving stamp duty on certain instruments, and removing the ability of the State Governments to determine rates or levy stamp duty in addition to the Act[2]. Continue Reading Decoding the Amendments to Indian Stamp Act, 1899, for Debentures – Part I

National Green Tribunanal Act and Real Estate

 

The first part of this two-part blog discussed the facts that led to the filing of appeals before the Supreme Court challenging the NGT’s judgment dated May 4, 2016 and certain key issues discussed by the Supreme Court in its Judgment disposing of these appeals. In this piece, the second part of the two-part blog, we discuss other significant issues that have been dealt with in the Judgment and analyse the findings to deduce the reasoning employed by the Supreme Court in reaching its decision. Continue Reading Supreme Court’s Diktat on Powers of the NGT: Can Developers Finally Rest Easy? – Part 2

Supreme Court’s Diktat on Powers of the NGT: Can Developers Finally Rest Easy?

 

Introduction

The Hon’ble National Green Tribunal, Principal Bench, New Delhi (NGT), vide the judgment dated May 4, 2016 in the Original Application No. 222 of 2014 (Original Application), passed certain orders, which had wide scale impact on the real estate developers in the city of Bengaluru. The NGT directed that the buffer zones maintained around lakes and rajakaluves (drains) were to be increased substantially more than provided under the zoning regulations in the Revised Master Plan 2015 (RMP 2015). The RMP 2015 provided for buffer zones of 30 meters from the centre of the lake, for primary rajakaluves it was 50 meters from the centre of the rajakaluve, for secondary rajakaluves, it was fixed at 25 meters and for tertiary rajakaluve it was 15 meters. The Hon’ble Supreme Court of India (Supreme Court) has recently passed a judgment in Civil Appeal No. 5016 of 2016 and other connected appeals on March 5, 2019 (Judgment). These appeals were filed challenging the NGT’s judgment dated May 4, 2016.

In this first part of a two-part blog, we discuss the facts that led to filing of the present appeals before the Supreme Court and a couple of key issues discussed in the Judgment. Continue Reading Supreme Court’s Diktat on Powers of the NGT: Can Developers Finally Rest Easy? – Part 1

Surrogacy Bill and ART Bill in India

India is currently facing a declining fertility rate and a changing social structure, with late marriages and single parenthood becoming more common. In light of this, does the proposed ART Bill and Surrogacy Bill restrict or enhance the reproductive choices available to Indian citizens?

Assisted Reproductive Technology (ART), as commonly understood, comprises procedures such as in-vitro fertilisation (IVF), intra-uterine insemination (IUI), oocyte and sperm donation, cryopreservation and includes surrogacy as well. Social stigma of being childless and lengthy adoption processes have increased the demand for ART in India. It is thus not surprising that the ART industry is expected to grow by a compounded annual growth rate of 10%.

No legislation currently regulates ART in India. In 2002, the Indian Council of Medical Research (ICMR) laid out guidelines for surrogacy. Further, in 2005, the ICMR issued the ‘National Guidelines for Accreditation, Supervision and Regulation of ART Clinics in India(ICMR Guidelines), which inter alia, prescribed the conditions that ART clinics need to comply with. Both the above initiatives did not have any legislative backing. Thereafter, the Assisted Reproductive Technology Bill (ART Bill) was first proposed in 2008, with the final version being brought out in 2017. The Surrogacy (Regulation) Bill, 2016 (Surrogacy Bill) was passed by the Lok Sabha in December, 2018, and is currently pending Rajya Sabha approval.  Continue Reading Surrogacy Bill and ART Bill: Boon or Bane?

Part I - Electric Vehicles: Disrupting the Automotive Ecosystem

The Indian economy is one of the fastest growing economies in the world, with an increasing demand for energy. Given that historically India has relied on pollutant hydrocarbons to run its power plants and vehicles, there has been an increasing focus on setting ambitious ‘green’ targets, especially in light of the alarming levels of pollution in India. The Government of India (GoI) has actively encouraged the adoption of electric vehicles with the idea of shifting the production of new automotive vehicles from internal combustion engine models to electric vehicles by 2030. Continue Reading Part I – Electric Vehicles: Disrupting the Automotive Ecosystem