Public M&A: New Delisting Norms – What is the Excitement Really About?

  • SEBI’s Consultation Paper proposes a comprehensive review of counter-offer mechanism,
    counter-offer price discovery mechanism, fixed price mechanism, floor price and reference date

  • Fixed price delisting, largely regarded as a welcome move, fails to excite us and appears lackluster against the present reverse book building mechanism due to absence of a counter-offer mechanism

Public M&A: Does SEBI’s Market Rumour Proposal Offer the Much-Needed Price Protection?

  • In June 2023, SEBI introduced “rumour verification requirements” requiring listed companies to address market rumours; trigger for “materiality” pegged to “expected impact”on turnover, net worth, or value of profit/loss after tax
  • SEBI’s December 2023 Consultation Paper now proposes to (a) peg materiality…

Public M&A: Do List Cos Really Need Omnibus RPT Approvals?

  • There seems to be an overlap between regular RPT approvals and omnibus approval routecreating ambiguity on what type of approvals must be procured for long term related partycontracts?
  • Listed companies often enter into long term contracts with…

Smart meters: The basic infrastructure for a green future

  • Smart meters are essentially a data play – offering unprecedented data that can be used to bring online more green energy, curb electricity loses and reduce costs for consumers
  • The sector has immense depth – USD 30 bn over just the next 2-3 years….

    Investing into Infrastructure Holding Companies: What if you become a core investment company?

    • Infrastructure companies are mandated to execute concessions through SPVs, which often results in qualification of the holding company as a core investment company (CIC)
    • CIC risk is often avoided by structuring EPC and O&M revenues through the hol- ding company and swelling …

      Ambiguity with thin cap norms: Private credit players risk significant tax leakage

      • Accurate reading of thin capitalization norms is highly relevant to maximize IRRs, especially in asset heavy sectors
      • Currently, norms interpreted such that sometimes the entire interest paid to foreign related parties is disallowed for the target (as expense)…

        Budget 2023: Impact on InvITs

        • Distributions out of repayment of debt principal could now be taxed as ‘other income’ – at odds with global standards
        • Distributions out of debt repayments through redemption of units not treated as ‘income’, but reduce cost of acquisition – InvIT / REIT Regulations do not permit redemption of units…

          Private Funds: SEBI introduces investor diligence requirements for AIFs

          • SEBI has cast new investor diligence obligations on AIF managers, which extends to underlying investors
          • As per the new rule, the manager of an AIF is not permitted to on-board new investors or draw down capital from existing investors unless the diligence conditions have been complied with…

            EduInfra – Emergence of a new asset class

            • EduInfra offers a promising 10 – 11% entry cap rate for annuity investors with rental escalations in the region of 3
              – 5%

            • Infrastructure classification allows for tax optimal exit through InvITs
            • Seller awareness needed – operators slowly moving towards asset light models; depth, but potential…

              Investor or developer? Real estate regulator (RERA) classifies real estate fund as a promoter

              • The term ‘causes to construct’ in the definition of ‘promoter’ under RERA has been interpreted to include private funds exercising rights typical to such investments

              • Protective rights of investors have been interpreted as being secondary to the rights of the homebuyers – in a conflict, the latter should be protected, notwithstanding inter-se contractual relationship between developer and fund…

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