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CAM Corporate Team

The CAM Corporate Team can be reached at cam.mumbai@cyrilshroff.com

REITs in India - A prescription for regulatory inoculations and booster shots

In our previous piece , we had gazed into our crystal ball for predictions on the future of REITs in India, specifically in light of the ongoing Covid-19 pandemic and its aftermath. However, putting the largely untameable forces of macroeconomic factors, sectoral outlooks and market perceptions aside, there are some regulatory changes which, if introduced by the relevant regulators in a timely manner, could provide the real estate sector and specifically, REITs in India, with the necessary shot in the arm to thrive in the times to come. Set out below is a short wish-list.
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GOODBYE CHINA; HELLO INDIA

The noise around large companies shifting their manufacturing bases out of China has gotten shriller with the advent of Covid-19 related disruption. The theme is not new. Since the trade war between the United States and China, much has been written about companies shifting their operations from China to other South East Asian countries such as Vietnam, Thailand and Taiwan. India is hopeful of getting it right this time around and is competing with other South East Asian countries in rolling out the red carpet to companies exiting China. In anticipation of any announcements that may be made by the Government in this regard, this article examines some of the key factors that are relevant for companies contemplating a shift to India.
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Debt capital markets - a bumpy road ahead

The novel coronavirus pandemic (“Covid-19”) has brought about a new set of challenges for the Indian economy. While our economy successfully weathered the 2008 financial crisis, the current scenario has halted economic activity for most of the sectors. While the reasons for the previous and current crises are different, some trends are similar. One of these is the inability of borrowers to service debt.

The 2008 financial crisis was characterised by defaults in various debt instruments such as term loans, external commercial borrowings and FCCBs. To combat this, the Reserve Bank of India introduced a host of measures such as relaxation on restructuring of various loan accounts[1] and allowance to firms to use rupee amounts to buy back FCCBs. Simultaneously, in order to create a vibrant market for corporate bonds[2], the Securities and Exchange Board of India introduced the Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (the “SEBI ILDS Regulations”).
Continue Reading Debt Capital Markets – A Bumpy Road Ahead

Reimagining the Good Times - Start-ups and the Covid-19 Crisis

In recent years, the start-up ecosystem in India has emerged as a reckoning force, largely due to efforts of stakeholders and initiatives implemented by the government to facilitate growth. Investments in start-ups surged from $550 million in 2010 to $14.5 billion in 2019.[1]

The Covid-19 pandemic has now adversely impacted the overall investment climate. While businesses across sectors have felt repercussions of the Covid-19 pandemic, start-ups have been particularly vulnerable and are facing formidable challenges both from a business and operations perspective. Most start-ups have witnessed a decline in supply/demand, except those engaged in supply/delivery of ‘essential services’ and edu-tech/gaming/streaming services. However, despite this increased demand, glitches in the supply chain network have presented challenges. The start-up ecosystem has been striving to adapt to the present situation by focussing on the need to innovate and diversify.
Continue Reading Reimagining the Good Times: Start-ups and the Covid-19 Crisis

COVID-19 TEST KITS. A CHEAT SHEET

The COVID-19 pandemic has literally brought the world to a standstill. Large scale infections have resulted in lockdowns across the globe. At this critical juncture, testing continues to remain the most important step to get a grip over the situation. The situation in India is no different. With an upsurge in the number of COVID-19 cases in India, the need for largesse testing has become paramount. Low availability of test kits remains a cause of great concern to the government and healthcare practitioners. This is compounded by our massive populace, given the quantity that is required in the current scenario. This lack of availability of test kits is primarily because India does not have adequate indigenous manufacturing units of COVID-19 test kits and relies heavily on imported kits.

From a regulatory standpoint, such kits fall under the category of ‘in-vitro diagnostic’ kits under the Drugs and Cosmetics Act, 1940 (D&C Act) read with the Medical Devices Rules, 2017 (MD Rules) and are regulated as ‘medical devices’[1].
Continue Reading COVID-19 Test Kits. A Cheat Sheet

Back to the future - restoring the Mauritius route for FPI investments

Background

On September 23, 2019, the Securities and EXCHANGE Board of India (“SEBI”) notified the SEBI (Foreign Portfolio Investors) Regulations, 2019 (“New FPI Regulations”), overhauling the erstwhile SEBI (Foreign Portfolio Investors) Regulations, 2014 (“Erstwhile FPI Regulations”). Under the New FPI Regulations, SEBI recategorised FPIs in to two categories (as against the three categories under the Erstwhile FPI Regulations), based on their regulatory status and jurisdiction of residence. Under the New FPI Regulations, Category I FPIs include sovereign wealth funds, pension funds, appropriately regulated entities, certain endowments and other entities from the Financial Action Task Force (FATF) member countries, which are appropriately regulated funds or unregulated funds whose investment manager is appropriately regulated and registered as Category I FPI or is owned to the extent of at least 75% by certain Category I FPIs. Category II FPIs include entities that do not qualify for Category I status under the New FPI Regulations. Further, on account of the overhauling and recategorisation under the New FPI Regulations, those Category II FPIs under the Erstwhile FPI Regulations, which did not qualify to be recategorised as Category I FPIs under the New FPI Regulations got recategorised as Category II FPIs under the New FPI Regulations, along with Category III FPIs under the Erstwhile FPI Regulations. Hence, with one stroke of the pen, Mauritius based FPIs became disentitled for Category I status as Mauritius is not an FATF member.
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Barbarians at the gate – no entry without approval

To say that the Covid-19 has unleashed unprecedented times is an understatement. Every country, government, regulator and citizen across the globe is trying to come to terms with the implications of this deadly virus and surviving it. It is indeed a Hobson’s Choice – to save lives or to save the economy. But several countries, in said and unsaid words, have expressed vulnerability to the corporate raiders from China! They are literally at the gate and it has become a cause of worry for most governments and corporations.

Japan has proposed building an economy that is less dependent on China, so that Japan can mitigate supply chain disruptions caused by the current Covid-19 pandemic. To this end, Japan announced an emergency economic package on April 7, 2020, earmarking 240 billion yen (approximately USD 2.2 billion) for fiscal 2020 to pay  Japanese manufacturing firms to leave China and relocate production either to their home country or to diversify their production bases into South East Asia. Australia, Italy, Spain, and Germany have announced amendments to their respective foreign investment laws to make acquisitions and takeovers by foreigners much harder. So has the European Union. The Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) of the United States has seen increased review of foreign investments under the Trump administration due to security and national interest concerns.
Continue Reading Raising the Wall – No Entry without Approval

Corporate house-keeping during a crisis

Secretarial compliances, periodic reporting and disclosure requirements, programmed into the DNA of listed companies, often proceed seamlessly following protocols defined by the legal regime and industry best practices. However, with social distancing advisories changing the way in which corporate India goes to work, management and secretarial teams will need to re-assess established protocols and approach day to day internal housekeeping matters a little differently in the coming months.
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DIAL-A-DOCTOR-A-look-at-the-Telemedicine-Practice-Guidelines-2020

The Ministry of Health and Family Welfare (“MoHFW”), on March 25, 2020, issued the Telemedicine Practice Guidelines (“Guidelines”) providing Registered Medical Practitioners (“RMPs”) with guidelines to treat patients remotely by using the telemedicine tools at their disposal.

Concepts such as telemedicine have gained prominence pursuant to the rapid development of information technology and the need to service the requirements of patients who may not be able to visit healthcare facilities, or have little to no access to the same. Such services involve the transfer of medical information and expertise through telecommunication and computer technologies and aim to facilitate diagnosis, treatment and management of patients. Currently, in India, platforms such as ‘practo’ and ‘DocOnline’ exist which facilitate online medical consultations albeit in a restricted manner given stringent regulatory controls on the practice of medicine. Though such platforms would help to deliver widespread healthcare services, there exist several concerns that exist about the medicolegal implications of telemedicine relating to registration, licensing, insurance, quality, privacy and confidentiality issues, as well as other risks associated with electronic health care communication.
Continue Reading DIAL A DOCTOR- A look at the Telemedicine Practice Guidelines, 2020

REITs in India - Some predictions for the next 24 months

  • Tenant-landlord dynamics are likely to change. In the short term, tenants may seek dispensation, moratoriums or discounts to their payment obligations, on the grounds of force majeure or otherwise. In the medium term, there will be an expectation from developers to increase spend on social wellness and hygiene infrastructure.
  • The forced experiment of remote working may become a norm for certain businesses and have an impact on the flexi-working policies of all businesses, one way or another. As a result, tenants may reassess their space utilisation requirements, and developers, their ability to offer IT infrastructure, which can enable seamless connectivity for their tenants.

Continue Reading REITs in India: Some predictions for the next 24 months (and beyond)