JUNE 2020

JUNE 2020 | ISSUE 4 THE PE & M&A QUARTERLY

Quarterly News, Trends and Developments

Off the Record

“The COVID-19 pandemic has adversely affected all sectors in and across the globe, except a few. Though initially it was expected that the pandemic would end in a few months, it appears that it will continue for a longer period. Many PE firms and strategic investors have paused or deferred or slowed down their investment plans for the next 6 to 8 months. However, there are exceptions in case of a few. The deal making activity in India appears uncertain for the remainder of this year. On the M&A side, domestic deals are being evaluated. It is getting harder to close transactions in view of mismatch in expectations of the seller and buyer. The present situation has forced them to realign their objectives and expectations. In signed deals, material adverse change clauses are being evaluated, and in new deals it is being made as exhaustive as possible to ensure possible exit in case of change in environment. The overall structure of doing deals is going through a change and the focus is shifting to value creation and sustainability. There is a reasonable possibility that towards the end of the year, if we return to some sense of normalcy, there will be a significant increase in M&A and PE activity.” Satish Kishanchandani, Managing Partner

FEATURED JUDGEMENT Banyan Tree vs Axiom Cordages Limited and Ors.

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LEGAL UPDATES

NON-FATF MEMBERS ALLOWED TO REGISTER AS CATEGORY I-FPI SEBI Updates April 07, 2020: The Securities and Exchange Board of India (“SEBI”) has relaxed the rules with respect to SNAPSHOT offshore funds seeking to get registered under the • For all relevant COVID-19 relaxations in “properly regulated” Foreign Portfolio Investor (“FPI”) compliances permitted by SEBI, visit our category. At present, funds from jurisdictions that are resource centre by clicking here. Financial Action Task Force (“FATF”) compliant are • Non-FATF Members allowed to register as permitted to get a licence under properly regulated Category I-FPI category or Category-I. • Relaxations under SEBI (LODR) Regulations: By amending the FPI Regulations, 2019, SEBI has ➢ Prior intimation of board meetings (for allowed entities from any country specified by the consideration of financial results) to stock exchanges reduced from 5 days to 2 days, Central Government by an order or by way of an till July 31, 2020. agreement or treaty with other sovereign ➢ Allowed top 100 listed companies to delay governments to be eligible to be registered as a AGMs. Category I – FPI. ➢ No need to dispatch annual reports to Link here. investors; Banks and companies exempted from filing consolidated EASE IN PUBLIC MARKETS FUND RAISING NORMS financials. • Ease in Public Markets Fund Raising Norms. April 21, 2020: SEBI has extended the validity of regulatory approval for launching IPOs and rights issue • Relaxations from certain provisions of SEBI (ICDR) Regulations, 2018. by 6 months due to COVID-19. The validity of SEBI's observations, where the same have expired or will • Companies allowed to raise funds after 6 expire between March 01, 2020 and September 30, months of making a buyback offer. 2020, has been extended by 6 months from the date • Relaxations on non-compliance with the of expiry of such observation subject to an undertaking Minimum Public Shareholding requirements. from lead manager of the issue confirming compliance • Relaxations in the procedural matter with Schedule XVI of the ICDR Regulations while pertaining to takeovers and buy-back. submitting the updated offer document to the Board.

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The notification also provided that an issuer whose buyback offer and any fund-raising activity by a listed offer document for IPO, followed by public offer and company. rights issue is pending receipt of its observation, will be permitted to increase or decrease the fresh issue Link here. size by up to 50% of the estimated issue size without requiring to file a fresh draft offer document with SEBI. RELAXATIONS ON NON-COMPLIANCE WITH THE The relaxation on change in fresh issue size will be MINIMUM PUBLIC SHAREHOLDING REQUIREMENTS applicable for offer documents pending receipt of SEBI observations until December 31, 2020. May 14, 2020: SEBI relaxed the stipulations with respect to Minimum Public Shareholding (“MPS”) non- Link here. compliant listed entities, their promoters and RELAXATIONS FROM CERTAIN PROVISIONS OF SEBI directors, including levy of fines, freeze of promoter (ICDR) REGULATIONS, 2018 (“SEBI ICDR Regulations”) holding etc. SEBI vide its Circular IN RESPECT OF RIGHTS ISSUE No. CFD/CMD/CIR/P/2017/115 dated October 10, 2017 laid down the procedure of non-compliance with April 21, 2020: SEBI has provided certain temporary the MPS requirements. SEBI had received relaxations with respect to the eligibility conditions representations from listed entities and industry related to fast track issue of shares. The relaxations bodies to grant relaxation from the applicability of the inter alia include (i) relaxation in the pre-condition October 10, 2017 circular. with respect to listing of equity shares from 3 years to 18 months; (ii) companies with a market size of atleast Relaxations have been granted for listed entities for INR 100 crore are permitted to enter the fast track whom the deadline falls between the period from issue route; (iii) companies wherein its promoters or March 01, 2020 to August 31, 2020. The Stock whole time directors have been have been issued with Exchanges are advised not to take any penal action show cause notices or prosecution proceedings will be against such entities in case of non-compliance during eligible for the rights issue provided the adjudication the said period. The penal actions, if any, initiated by proceedings or the prosecution proceedings have Stock Exchanges from March 01, 2020 till date for non- been adequately disclosed and its adverse impact has compliance of MPS requirements by such listed been mentioned in the letter of offer. Further, the entities may be withdrawn. The said circular shall minimum subscription to be received in the issue has come into force with immediate effect. been reduced from 90% to 75%. Lastly, the circular has Link here. provided that the conditions prescribed in Chapter III of the SEBI ICDR Regulations will not apply in case of a RELAXATIONS IN RESPECT TO FURTHER PUBLIC OFFER rights issue carrying an issue size of less than INR UNDER SEBI ICDR REGULATIONS 25,00,00,000. June 09, 2020: SEBI decided to provide relaxations in Link here. certain provisions under the SEBI ICDR Regulations with respect to further public offer. Due to the COVID- RELAXATIONS UNDER REGULATION 24 (I) (F) OF THE 19 pandemic SEBI has given certain relaxations for fast SEBI (BUY-BACK) REGULATIONS, 2018 track rights issue. In addition to this, SEBI provided the April 23, 2020: SEBI has allowed listed companies to following relaxations in the eligibility conditions for raise funds after 6 months of making a buyback offer. the fast track further public offering: While the relaxation will come into force with • In Regulation 155 (c) related to ‘eligibility immediate effect, it will be applicable until December conditions for fast track route’ in case of public 31, 2020. Under normal circumstances, SEBI norms issue now requires the average market stipulate a minimum gap of 12 months between a

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capitalisation of public shareholding of the issuer to be at least INR 500 crore instead of INR 1,000 SNAPSHOT crore. • Relaxations under SEBI (ILDS) and SEBI (NCRPS) Regulations. • The amended Regulation 155 (h) now requires the issuer to specifically represent that no show cause • Relaxations under ICDR Regulations in case of further Public Offer through fast track route. notices, excluding under adjudication proceedings, have been issued by the Board and • Significant amendments made under SEBI (Substantial Acquisition of Shares and Takeovers) pending against the issuer or its promoters or Regulations, 2011. whole-time directors as on the reference date, in the offer documents. In the event such a notice • Introduction of an operational framework for transactions in default debt securities under SEBI has been issued to the issuer or its promoters/ (Issue and Listing of Debt Securities) Regulations, directors/ group companies, the issuer is required 2008. to make necessary disclosures in respect of such • Relaxation of time gap between 2 board or audit actions along-with its potential adverse impact on committee meetings for the listed entities.

the issuer in the offer documents. • Relaxations in timelines for compliance with regulatory requirements for Depository Participants • The amended Regulation 155 (i) now requires the and Registrars to an Issue & Share Transfer Agents. issuer to specifically represent that the issuer or promoter or promoter group or director of the SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND issuer has fulfilled the settlement terms or TAKEOVERS) (AMENDMENT) REGULATIONS, 2020 adhered to directions of the settlement order(s) in cases where it has settled any alleged violation of June 16, 2020: SEBI issued the SEBI (Substantial securities laws through the consent or settlement Acquisition of Shares and Takeovers) (Amendment) mechanism with the board. Regulations, 2020 to further amend the SEBI (Substantial Acquisition of Shares and Takeovers) • The amended Regulation 155(l) now requires that Regulations, 2011, in the following manner: any impact of audit qualifications, where quantifiable, on the audited accounts of the issuer • Under Regulation 3 related to “Substantial in respect of those financial years (“FY”) for which acquisition of shares or voting rights” a proviso such accounts are disclosed, shall be appropriately has been inserted, stating that the acquisition disclosed and accounts accordingly restated, in beyond 5% but up to 10% of the voting rights in the offer documents. Further, that for the the target company shall be permitted for FY qualifications wherein impact on the financials 2020-21 only in respect of acquisition by a cannot be ascertained the same shall be disclosed promoter pursuant to preferential issue of equity appropriately in the offer documents. shares by the target company.

• All these temporary relaxations shall be valid for • The relaxation under the Regulation 6 which all the fast track further public offerings that will specifies ‘Voluntary Offer’, where an acquirer or be opened on or before March 31, 2021 and shall any person acting in concert with him has not be applicable for issuance of warrants. acquired shares of the target company in the preceding 52 weeks without attracting the This circular shall come into force with immediate obligation to make a public announcement of an effect. open offer, he shall not be eligible to voluntarily make a public announcement of an open offer for Link here.

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acquiring shares under this regulation, has been securities, before the 2 days of maturity or granted till March 31, 2021. redemption. Even on the date of maturity, such restrictions shall be applicable until the time and Link here. the status payment has been determined.

SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND • The status of payment shall be intimated within TAKEOVERS) (SECOND AMENDMENT) REGULATIONS, one working day of the payment or the 2020 redemption date.

June 22, 2020: SEBI issued the SEBI (Substantial • In case the status of payment is not intimated Acquisition of Shares and Takeovers) (Second within the stipulated period, the transaction shall Amendment) Regulations, 2020 to further amend the be restricted until then. SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011, in the following manner: • All the default statuses shall be assessed, and a report shall be prepared of the default status on A new Regulation 10 (2B) related to “General the April 02, end of every FY. Exemption” has been inserted, namely: The provisions of this circular came into force on July “Any acquisition of shares or voting rights or control of 01, 2020. the target company by way of preferential issue in compliance with Regulation 164A of the SEBI (Issue of Link here. Capital and Disclosure Requirements) Regulations, 2018 shall be exempt from the obligation to make an SEBI BOARD MEETING open offer under Regulation 3 (1) and Regulation 4”. June 25, 2020: SEBI took the following decisions in its The aforesaid exemption from open offer shall also Board meeting: apply to the target company with infrequently traded • Decided to provide an additional option to the shares. The pricing of such infrequently traded shares existing pricing methodology for preferential shall be in terms of Regulation 165 of the SEBI (Issue of issuance available for the preferential issues made Capital and Disclosure Requirements) Regulations, between July 01, 2020 or date of notification of 2018. amendment to the SEBI ICDR Regulations, Link here. whichever is later and December 31, 202.

CIRCULAR FOR OPERATIONAL FRAMEWORK FOR • Approved the amendment to SEBI (Substantial TRANSACTIONS IN DEFAULTED DEBT SECURITIES Acquisition of Shares and Takeovers) Regulations, 2011, mainly in relation to: June 23, 2020: SEBI decided to introduce an operational framework for transactions in default debt ➢ Acquisition through stock exchange securities post maturity date or redemption date settlement process through bulk and/or block under the provisions of SEBI (Issue and Listing of Debt deals shall be permitted during the open Securities) Regulations, 2008. offer;

Following pointers have been issued under the ➢ In case of indirect acquisitions where public operational framework: announcement of an open offer has been made, an amount equivalent to 100% of the • Stock exchange agencies are not allowed to get consideration payable under the open offer into any transactions under defaulted debt

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must be deposited 2 working days before the purpose of calculation of the base amount in date of detailed public statement; terms of Table X of Schedule II; Base Amount for alleged defaults relating to open offer ➢ In case of delays in making open offer violations, where the making of the open offer attributable to the acts of omission or has become infructuous, to be rationalised and commission of the acquirer, a simple interest benchmark for certain Base Amount in Schedule II of 10% shall be paid to all the shareholders to be suitably amended; In order to save time, who have tendered the shares in the open instead of issuing settlement notice under offer. Regulation 18, a paragraph shall be included in the show cause notice, informing the notice about the • Approved amendments to SEBI (Prohibition of option to file a settlement application; etc. Insider Trading) Regulations, 2015. The amendments include maintaining a structured Link here digital database containing nature of unpublished price sensitive information and the names of persons who have shared the information; automation of process of filing disclosures to stock exchanges, restriction on trading window not

to be made applicable for transactions as prescribed by SEBI, entities to file the non-

compliances of Code of Conduct with the stock exchanges and amounts if any collected for such non compliances shall be credited to Investor Protection Education Fund administered by Board under the SEBI Act.

• Approved some amendments to the SEBI (Settlement Proceedings) (Amendment) Regulations, 2020 including Promoters to be

included along with the Principal Officer for the .

6 ISSUE 4 JUNE 2020 MCA Updates spent for various activities related to COVID-19 relating to promotion of health care including SNAPSHOT preventive health care and sanitation, and disaster management. • For all relevant COVID-19 relaxations in compliances permitted by MCA, visit our resource • Payment of salary or wages to employees, workers centre by clicking here. or temporary or casual or daily wage workers • FAQs on CSR expenditure related to COVID-19 during the lockdown period shall not qualify as activities. admissible CSR expenditure. • Clarifications on passing of ordinary and special resolutions. • Ex-gratia payment made to temporary/ casual workers/ daily wage workers over and above the • Companies (Appointment and Qualification of disbursement of wages, specifically for the Directors) Second Amendment Rules, 2020. purpose of fighting COVID 19 shall be admissible • Clarifications on holding AGMs via video towards CSR expenditure. conferencing or other audio-visual modes. Link here. • Indian start-ups can now issue for upto 10 years from date of incorporation. CLARIFICATION ON PASSING OF ORDINARY AND • Companies (Meetings Of Board And Its Powers) SPECIAL RESOLUTIONS Second Amendment Rules, 2020. April 13, 2020: In furtherance to its earlier clarifications with regard to passing of ordinary and special resolutions of urgent nature vide General FAQS ON CORPORATE SOCIAL RESPONSIBILITY Circular No. 14/2020 dated April 08, 2020, MCA had EXPENDITURE RELATED TO COVID-19 ACTIVITIES received representations from stakeholders for April 10, 2020: The Ministry of Corporate Affairs clarification on modalities to be followed for conduct (MCA) issued Frequently Asked Questions (FAQs) and of Extraordinary General meeting (EGM) during clarifications on Corporate Social Responsibility (CSR) COVID-19 social distancing norms, to which MCA expenditure related to COVID-19 activities. provided the following clarifications:

The clarifications are as follows: • It clarified the manner and mode of issue of notices to the members before convening the • The contribution made to ‘PM CARES Fund’ shall general meeting. qualify as CSR expenditure under item no (viii) of • Requirement of voting by show of hands – The Schedule VII of the Companies Act, 2013 (“Act”). Chairman present at the meeting shall ensure that Any contribution made to either ‘Chief Minister’s the facility of e-voting system is available for the Relief Fund’ or ‘State Relief Fund for COVID-19’ is purpose of voting during the meeting held through not included in shall not qualify as admissible CSR VC or OAVM. expenditure, given that the same is not included in the said Schedule. • Passing of certain items only through postal ballot without convening a general meeting: • Contribution made to State Disaster Management ➢ It is clarified that the issue of notices by Authority to combat COVID-19 shall qualify as CSR companies by post and communication by expenditure. the members of their assent or dissent on • Spending CSR funds for COVID-19 related activities relevant resolutions by post. shall qualify as CSR expenditure. Funds may be

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➢ The company would send notice by email to people from one place to another for the calendar year all its shareholders who have registered their 2020. email addresses with the company or All such companies holding e-voting system, shall have or depository. The AGM through video conferencing mandatorily. In such communication of the assent or dissent of the meetings, all crucial points for the business operations members would only take place through the shall be discussed. All the financial statements shall be remote e-voting system, as no meeting will be forwarded via emails to all the directors and the required to be called. members party to the meeting. Before the financial • Sending of e-mails by members where a poll on statements are circulated, an advertisement should be any item is requires for companies covered in para given out in the newspaper specifying the details of 3-B of the General Circular dated April 08, 2020 – the AGM and the mode of conducting the AGM. It is clarified that the poll will take place during the In case the shareholders are not being paid dividend meeting and the members may convey their because of issues with the bank details, the cheque assent or dissent only at such stage on items must be drafted to them and sent through postal considered in the meeting by sending e-mails to services. the designated e-mail address of the company, which was circulated by the company in the notice In case of all the companies that are not mandated to sent to the members. have e-votes can have AGM only if they have the email addresses of half the members to be included in the Link here. meeting. Other measures to be followed, like the The notification further provided that the meetings regulations applicable to the companies having shall be held by companies via video conferencing or mandatorily e-voting rights. All the companies that are through EGM’s till June 30, 2020. But, after the not included under the general circular, shall have stakeholder’s recommendation, the MCA vide its delay in their AGM and shall forward the same through notification dated June 15, 2020 extended the notice to the competent authorities. aforesaid timeline till September 30, 2020. Link here. Link here. Please also refer to amendments vis-à-vis “Matters that should not be dealt through video conferencing or other audio-visual” below.

COMPANIES (SHARE CAPITAL AND DEBENTURES) AMENDMENT RULES, 2020

June 05, 2020: MCA has amended the Companies (Share Capital and Debenture) Rules. The major highlight of the amendment is that Indian start-ups can now issue sweat equity for upto 10 years since incorporation, which was earlier 5 years.

Link here.

CLARIFICATION ON HOLDING AGMs VIA VIDEO COMPANIES (MEETINGS OF BOARD AND ITS CONFERENCING OR OTHER AUDIO-VISUAL MODES POWERS) SECOND AMENDMENT RULES, 2020

May 05, 2020: MCA has clarified the issues on holding June 23, 2020: MCA issued the Companies (Meetings AGMs through video conferencing (VC) or other audio- of Boards and its Powers) Second Amendment Rules, visual means (OAVM) considering the COVID-19 2020 to further amend the Companies (Meetings of pandemic hit, in order to avoid the movement of Boards and its Powers) Rules, 2014.

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MCA relaxed the requirement of holding Board meetings with physical presence of directors under section 173 (2) read with Rule 4 of the Companies RBI Updates (Meetings of Board and its Powers) Rules, 2014 for approval of the annual financial statements, Board’s report, approval of prospectus, audit committee’s SNAPSHOT meetings for consideration of financial statement including consolidated financial statement , if any, to • For all relevant COVID-19 relaxations in compliances permitted by RBI, visit our be approved by the Board under subsection (1) of resource centre by clicking here. section 134 of the Companies Act, 2013 and approval of the matter relating to amalgamation, merger, • Medium Term Framework for investment by FPIs in Government Securities. demerger, acquisition and takeover. Such meetings may till September 30, 2020 be held through video • Amendment of the Master Directions on Know conferencing or other audio-visual means by duly Your Customer (KYC) Regulations, 2016. ensuring compliance of Rule 3 of the said Rules. • Foreign Exchange Management (Non-Debt Instruments) Amendment Rules, 2020. Link here. • Extension of moratorium on payment of term loan till August 31, 2020.

MEDIUM TERM FRAMEWORK FOR INVESTMENT BY • Discussion Paper on Governance in Commercial Banks in India. FPI IN GOVERNMENT SECURITIES • Notification of Guidelines for NBFCs and Banks April 15, 2020: The Reserve (“RBI”) to be followed while outsourcing digital lending issued Medium Term Framework for investment by FPI platforms. in government securities. The limits for FPI investment • The Banking Regulation (Amendment) in Government securities (G-secs) and State Ordinance, 2020. Development Loans (SDLs) shall remain unchanged at 6% and 2%, respectively, of outstanding stocks of securities for FY 2020-21. As per the RBI Circular dated AMENDMENT OF THE MASTER DIRECTION ON KNOW March 30, 2020, all investments by eligible investors in YOUR CUSTOMER (KYC) REGULATIONS, 2016 the specified securities will be under the Fully Accessible Route (FAR) and all the existing FPI April 20, 2020: RBI amended the Master Direction investments in the specified securities shall be (MD) on KYC Direction, 2016 dated February 25, 2016, reckoned under the FAR. by inserting a new Section 5A related to “Money Laundering and Terrorist Financing Risk Assessment by The calculation of outstanding stock of G-secs and utilization levels of limits under the MTF has REs”. This amendment focuses on periodic ‘Money accordingly been adjusted. The allocation of Laundering and Terrorist Financing Risk Assessment’ incremental changes in the G-sec limit over the exercises to be carried out by Regulated Entities (REs) ‘General’ and ‘Long-term’ categories shall be retained to identify, assess and take effective measures to at 50:50 for FY 2020-21. mitigate its money laundering and terrorist financing risk, to be reviewed annually by the Board of the REs, RBI has revised the prescribed limit for the Half yearly along with other incidental requirements. REs shall (April – September 2020 and October 2020 – March apply a Risk Based Approach for mitigation and 2021). management of the identified risk and should have Board approved policies, controls and procedures in Link here. this regard. Further, REs shall monitor the implementation of the controls and enhance them if necessary.

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Link here. months i.e. from June 01, 2020 to August 31, 2020 on payment of all instalments in respect of term loans FOREIGN EXCHANGE MANAGEMENT (NON-DEBT (including agricultural term loans, retail and crop loans). INSTRUMENTS) AMENDMENT RULES, 2020 In respect of working capital facilities sanctioned in the April 22, 2020: The Ministry of Finance issued the form of cash credit/overdraft, lending institutions are Foreign Exchange Management (Non-debt Instruments) permitted to allow a deferment of another 3 months, Amendment Rules, 2020 to further amend the Foreign from June 01, 2020 to August 31, 2020, on recovery of Exchange Management (Non-debt Instruments) Rules, interest applied in respect of all such facilities. Lastly, in 2019. respect of working capital facilities sanctioned in the form of cash credit or over draft to borrowers lending The amendments are made in Rule 6(a) related to institutions may recalculate the ‘drawing power’ by “Investments by person resident outside India”, stating reducing the margins till August 31, 2020 and review the that a person resident outside India may make working capital sanctioned limits upto March 31, 2021, investment, may subscribe, purchase or sell equity based on a reassessment of the working capital cycle. instruments of an Indian company in the manner and subject to the terms and conditions specified in Link here. Schedule I. The provisos have been substituted in the NOTIFICATION OF GUIDELINES FOR NBFCS AND BANKS following manner: TO BE FOLLOWED WHILE OUTSOURCING DIGITAL “Provided that an entity of a country, which shares land LENDING PLATFORMS border with India or the beneficial owner of an June 24, 2020: RBI issued a notification for loans secured investment into India who is situated in or is a citizen of by banks and NBFCs over digital lending platforms, any such country, shall invest only with the Government adherence to fair practices code and outsourcing approval: Provided further that, a citizen of Pakistan or guidelines. RBI has further clarified that, if NBFCs or an entity incorporated in Pakistan shall invest only under other banks are involved in any outsourcing digital the Government route, in sectors or activities other than lending platforms, they should follow the given defence, space, atomic energy and such other sectors or guidelines. activities prohibited for foreign investment. • On the website of the NBFCs and banks the names Provided also that in the event of the transfer of of the digital lending platforms shall be duly ownership of any existing or future FDI in an entity in mentioned. India, directly or indirectly, resulting in the beneficial ownership falling within the restriction or purview of the • The name of banks or NBFCs or banks shall be above provisos, such subsequent change in beneficial disclosed to the customer by the agents, on whose ownership shall also require government approval.” behalf they are interacting with the customers.

This Notification came into force on April 22, 2020. • After the sanction and before the execution of the loan agreement, the sanction letter shall be issued Link here. to the customer on the letter head of the bank or EXTENSION OF MORATORIUM ON PAYMENT OF TERM the NBFC. LOAN TILL AUG 31, 2020 • Loan agreement copy shall be issued to all the May 23, 2020: In view of the COVID-19 lockdown, RBI borrowers. has directed all commercial banks (including regional • Proper grievance mechanism should be framed, rural banks, small finance banks and local area banks), and proper awareness shall be generated in this co-operative banks, All India Financial Institutions, and scenario. Non-banking Financial Companies (including housing finance companies) (“Lending Institutions”) are Link here. permitted to extend the moratorium by another three

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THE BANKING REGULATION (AMENDMENT) is to provide long-term finance for agricultural ORDINANCE, 2020 development.

June 26, 2020: The Ministry of Law and Justice issued • Co-operative bank along with the prior approval of the Banking Regulation (Amendment) Ordinance, 2020 the RBI shall issue the equity shares or the to further amend the Banking Regulation Act, 1949, in preference shares for face value or at premium. the following manner: • Section 53A has been inserted specifying power to • Section 3 has been substituted which states that exempt co-operative banks in certain cases, subject this act shall not apply co-operative society in to certain conditions. certain cases. The further amendment has been • done specifying certain cases, where the act will The unsecured bonds shall have the minimum not be applicable such as primary agriculture credit maturity of at least 10 years. society and a co-operative society whose objective Link here.

CCI Updates

PUBLIC COMMENTS ON ‘NON-COMPETE noncompete restrictions may not be appropriate in RESTRICTIONS’ (UNDER CCI COMBINATION modern business environments. This would allow the REGULATIONS, 2011) parties flexibility in determining non-compete restrictions, while also reducing the information The Competition Commission of India (“CCI”) proposes burden on them. However, the parties will be to amend the CCI (Procedure in regard to the responsible for ensuring that their non-compete transaction of business relating to combinations) arrangements are competition compliant. Competition Amendment Regulations, 2020, in order to omit concerns, if any, that may arise from non-compete paragraph 5.7 of Form I in the said regulations that restrictions can be looked into under Sections 3 and/ or seeks information regarding non-compete restrictions 4 of the Competition Commission Act, 2002. Public agreed between the parties to combination and comments on the same have been received by the CCI justification for the same. CCI observed that prescribing and are presently being deliberated. a general set of standards for assessment of Link here.

IBC Updates

INSOLVENCY AND BANKRUPTCY BOARD OF INDIA These amendments came into force on April 17, 2020. (LIQUIDATION PROCESS) (SECOND AMENDMENT) Link here. REGULATIONS, 2020 INSOLVENCY AND BANKRUPTCY BOARD OF INDIA April 17, 2020: The Insolvency and Bankruptcy Board of (INSOLVENCY RESOLUTION PROCESS FOR CORPORATE India (IBBI) suitably amended the IBBI (Liquidation PERSONS) (SECOND AMENDMENT) REGULATIONS, Process) Regulations, 2016 to exclude the period of 2020 lockdown from the model time-line for liquidation process of a corporate debtor from the liquidation April 20, 2020: IBBI suitably amended the IBBI commencement date. (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 to clarify that ‘the period of lockdown

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imposed by the Central Government in the wake of bankruptcy process, as the case may be, if otherwise not COVID-19 outbreak shall not be counted for the disqualified, and in the interest of avoiding purposes of the time-line for any activity that could not administrative delays, IBBI considered it necessary to be completed due to such lockdown, in relation to a issue the said guidelines to prepare a Panel of Insolvency corporate insolvency resolution process. Professionals for the aforesaid purposes. These amendments are effective retrospectively from These guidelines came into effect on July 01, 2020 and March 29, 2020. supersede the earlier Guidelines on Insolvency Professionals to act as Interim Resolution Professionals, Link here. Liquidators, Resolution Professionals and Bankruptcy Trustee (Recommendation) Guidelines, 2019 issued on SNAPSHOT November 28, 2019. • For all relevant COVID-19 relaxations in compliances Link here. permitted by IBBI, visit our resource centre by clicking here. THE INSOLVENCY AND BANKRUPTCY CODE • IBBI (Liquidation Process) (Second Amendment) (AMENDMENT) ORDINANCE, 2020 Regulations, 2020. June 05, 2020: By virtue of the powers vested in him • IBBI (Insolvency Resolution Process for Corporate under the Constitution of India, the Hon'ble President of Persons) (Second Amendment) Regulations, 2020. India has promulgated the IBC Ordinance 2020 to • Insolvency Professionals to act as Interim Resolution effectively suspend the operation of Sections 7, 9 and 10 Professionals, Liquidators, Resolution Professionals of the IBC with respect to defaults arising on or after and Bankruptcy Trustees (Recommendation) March 25, 2020 for a period of 6 months, extendable up Guidelines, 2020. to a maximum of one year from such date as may be notified. • IBC (Amendment) Ordinance, 2020. Applications seeking to initiate CIRP for corporate debtors is allowed in case the following conditions are satisfied: INSOLVENCY PROFESSIONALS TO ACT AS INTERIM RESOLUTION PROFESSIONALS, LIQUIDATORS, • The default arose before March 25, 2020; RESOLUTION PROFESSIONALS AND BANKRUPTCY • The amount of default is more than INR 1 crore. TRUSTEES (RECOMMENDATION) GUIDELINES, 2020 These changes came into force on June 05, 2020. June 02, 2020: Given that every Insolvency Professional is equally qualified to be appointed as the Interim Link here. Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees of any corporate or individual insolvency resolution, liquidation or

FDI Updates

investment into India is situated in or is a citizen of any PRESS NOTE 3 INTRODUCED BY THE DEPARTMENT FOR such country, can invest only under the Government PROMOTION OF INDUSTRY AND INTERNAL TRADE route. It has furthermore been clarified that in the event April 17, 2020: In order to curb opportunistic of the transfer of ownership of any existing or future takeovers/acquisitions of Indian companies due to the foreign direct investment in an entity in India, directly or current COVID-19 pandemic, the Government of India indirectly, resulting in the beneficial ownership falling that an entity of a country, which shares land border within the aforesaid restriction such subsequent change with India or where the beneficial owner of an in beneficial ownership will also require Government approval. Link here.

12 ISSUE 4 JUNE 2020 FEATURED JUDGMENT

Banyan Tree Growth Capital vs AxiomCordages Limited and Ors.

Issue: Enforceability of foreign arbitral award

The Bombay High Court in the matter of Banyan Tree Growth Capital (“Banyan Tree”) versus Axiom Cordages Limited and Ors. (“Axiom”) vide order dated April 30, 2020 ruled that the foreign arbitral award passed by the Singapore International Arbitration Centre (“SIAC”) is legally enforceable and does not violate fundamental policy of Indian law.

In the instant case, Banyan Tree had invested 11.25% stake in Axiom Cordages Limited (“ACL”). The other shareholders in ACL were Responsive Industries Limited and Wellknown Business Ventures LLP. As part of the transaction, the parties executed a Share Subscription Agreement (“SSA”), Put Option Deed and an Escrow Agreement. Banyan Tree was entitled to 3 forms of exits under the SSA, one of them being exercise of a put option, wherein Responsive Industries Limited and Wellknown Business Ventures LLP would buy Banyan Tree's stake in ACL. Dispute arose between the parties in relation to mismanagement of escrow and arbitration proceedings commenced before SIAC. SIAC passed an arbitral award in favour of Banyan Tree. Banyan Tree sought enforcement of the arbitral award before the Bombay High Court.

Axiom challenged the enforcement of the arbitral award on the following grounds:

➢ The Put Option Agreement was not adequately stamped and therefore, the arbitration agreement would not exist when the agreement is itself insufficiently stamped.

➢ The Put Option Agreement violated provisions of Securities Contract Regulation Act, 1956 (“SCRA”) and the notifications issued thereunder.

➢ Put Option Deed provided for assured returns to the Petitioner and was violative of provisions of Foreign Exchange Management Act, 1999 (“FEMA”) and the notifications issued thereunder.

➢ The arbitral award was contrary to the fundamental policy of Indian Law.

The Bombay High Court rejected all the above-mentioned contentions made by ACL, Responsive Industries Limited and Wellknown Business Ventures LLP and ruled that the arbitral award was enforceable and was not contrary to the fundamental policy of Indian Law. In view of Put Option Deed challenged on the grounds of being violative of provisions of the SCRA, the Bombay High Court stated that the nature of the Put Option Deed was such that it could not be classified as an exclusive contract in derivatives as understood under the SCRA and since, the option in favour of Banyan Tree could neither be dealt with nor traded on the stock exchange, there was no question of existence of any speculative transaction between the parties, thereby attracting the provisions of the SCRA.

The court further added that from reading of the SSA and the Put Option Deed, it was quite clear that the Put Option Deed did not provide for an open-ended assured return to Banyan Tree, as an exit option and therefore, the provisions of FEMA were not violated.

Link here.

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FUND NEWS

Renuka Ramnath, Founder, MD & CEO of Multiples ASIAN DEVELOPMENT BANK TO INVEST USD 100 Alternate Asset Management, has been appointed as MILLION IN NIIF the Chairperson of Indian & Venture The Asian Development Bank will invest USD 100 million Capital Association (IVCA). Karthik Reddy, Founder & into the NIIF of India Fund of Funds. Other investors in Partner of Blume Ventures will take over as the Vice- the fund include the Government of India, Asian Chair. Infrastructure Investment Bank HDFC Group, ICICI Bank IVCA is a private equity/ (PE/VC) industry and Abu Dhabi Investment Authority. body focussed on promoting alternative investment NIIIF is India’s first that was set asset class within India. up by the Government in 2015 and now attracts up to Link here. USD 4 billion of capital commitments across three funds. NIIF, which is targeting a USD 1 billion corpus, invests in LIGHTSPEED RAISES USD 1.5 BILLION OPPORTUNITY private equity funds managed by India-focused fund FUND managers, with a focus on smaller and medium-sized enterprises that require growth equity to further scale Lightspeed Venture Partners which backs Oyo and up their businesses. Byju’s announced the closing of Lightspeed Opportunity Fund, L.P. (Opportunity Fund) with USD 1.5 billion in Link here. limited partner committed capital. The fund will be used to back breakout companies from across the world. WEWORK BOARD MEMBERS SUE SOFTBANK Link here. Two independent Directors of US-headquartered office- sharing giant WeWork have filed a lawsuit against OCTAHEDRON CAPITAL RAISES NEW INTERNET- SoftBank claiming the Japan-based technology FOCUSED GLOBAL CROSSOVER FUND investment group breached its contractual obligations by backing out of a USD 3 billion rescue plan. The San Francisco based investment firm Octahedron Capital will aim to “invest in the world's leading public The lawsuit came days after Softbank said it was backing and private companies that drive the global internet out of the plan to purchase WeWork shares to shore up economy”. The firm will invest in both “front-end” the finances of the struggling sharing economy giant. internet (e-commerce, ads & marketplaces) and “back- end” internet (payments and software that are the Link here. infrastructural building blocks of the internet) RENUKA RAMNATH APPOINTED CHAIRPERSON OF Link here. IVCA

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LGT LIGHTSTONE TO ATTRACT EXTERNAL CAPITAL IN foundations is about 20% of the total corpus raised by IMPACT INVESTMENT UNIT ACT Grants.

LGT Private Banking, LGT Capital Partners and Till date, ACT Grants has raised about INR 103 crore Lightstone, are to be spun out as independent from more than 50 venture capital firms, start-up companies under the ownership Prince of Liechtenstein founders, non-profit organizations and industry Foundation. veterans.

The impact investment unit, Lightstone, plans to make Link here. its investment portfolio of around USD 500 million TECH-FOCUSED VC FUND IRON PILLAR TOPS UP FIRST across 50 companies accessible to external investors via FUND WITH USD 45 MILLION a fund structure in the fourth quarter of 2020. Iron Pillar has raised USD 45 million. Iron Pillar Fund-I From the Venture Intelligence PE-VC Deal Database LGT had held its final close in 2018, with capital Lightstone Aspada’s portfolio has about 30 companies commitments of USD 90 million. The top-up will help the in India, including 8 new investments announced in firm back specific Fund-I portfolio companies, which are 2020. doing well in current market conditions. Three global Link here. institutions, including a global alternatives investor and a large European participated in this top-up SEQUOIA INDIA LAUNCHES MICROSITE fund. India has launched a microsite to serve Through its Fund-I, Iron Pillar has made eight as a resource for founders and their teams to take on investments, and witnessed one exit from SaaS the challenges due to COVID-19 crisis. Company. Sequoia Capital India’s existing portfolio across India & With the top-up fund, Iron Pillar has added three global ASEAN have raised a total of USD 2.8 billion in Q1 2020 institutions to its base of Limited Partners, or investors. from various investors including Sequoia. These include alternative assets investor 57 Stars LLC In April, venture capital (VC) firms including Sequoia and a large European family office. Capital, along with other prominent Indian start-up Link here. founders and CEOs, came together to launch ACT (Action Covid Team), which provided grants to BASIC VECTORS LAUNCHES USD 50 MILLION SAAS- companies developing original solutions to combat the FOCUSED FUND spread of the COVID-19. Venture Capital firm Basic Vectors has launched a USD Link here. 50 million worth technology fund which would mainly focus on software companies. Headquartered in New NON-PROFIT ACT GRANTS ATTRACTS FUNDING FROM York with offices operational in India, Silicon Valley, and GATES, DELL, WADHWANI FOUNDATIONS Ukraine, Basic Vectors’ new fund would be mainly ACT is a coalition of VCs, start-up community founders, investing in B2B software-as-a-service (SaaS) based entrepreneurs, investors and other industry veterans. companies. Cianna Capital is the lead investor in the newly launched fund. Other limited partners in the fund ACT has got fresh funding from Bill & Melinda Gates include the family offices of Rajesh Jain, founder of Foundation, Michael & Susan Dell Foundation as well as Netcore, and Tracxn’s co-founder Abhishek Goel. from Wadhwani foundations. ACT offers grants ranging from INR 1,00,000 to INR 10,00,00,000 crore to Basic Vectors claims to accelerate growth and make initiatives that use technology to create large-scale investments in lower-mid market vertical SaaS impact in the detection, prevention and eradication of companies and help them build a sustained and long- COVID-19. The total commitment from these 3 term business. Link here.

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INVESTMENT PLATFORM FOR COMMERCIAL From its first fund, Arkam Ventures expects to back 15 PROPERTY PROPSHARE CAPITAL RAISES INR 80 CRORE to 18 companies at the Series A and Series B stages, having initial investment sizes ranging from INR 15-30 PropShare Capital, a tech platform that enables crore. The fund has already invested in lending startup individuals to participate in commercial real estate Krazybee and business-to-business grocery platform investments, has raised INR 80 crore for its COVID-19 Jumbotail and is in the process of backing three more distressed opportunities portfolio management scheme startups, which operate in financial services and offering. The firm closed its Distress Opportunity Fund I agriculture technology. The fund’s investment thesis is (PDOF I) with online participation from over 150 around finding startups that cater to the so-called investors including high net worth individuals, family middle India comprising of individuals having annual offices, retail and institutional investors that included a family incomes ranging between INR 3,00,000 to INR Japanese family office. 20,00,000. Propshare is focused on commercial real estate that has Link here. been leased out to multinationals. The platform currently manages over INR 330 crore of investments AAVISHKAAR CAPITAL TO RAISE USD 150 MILLION and allows investors to participate with a relatively low FUND FOR SOUTHEAST ASIA threshold of INR 25-50 lakh. Aavishkaar Capital is raising a USD 150 million fund Link here targeting investments in Indonesia, Vietnam, Bangladesh and other emerging markets in Southeast JM FINANCIAL RAISES INR 160 CRORE FOR DISTRESSED Asia. OPPORTUNITIES FUND Link here. JM Financial Credit Alternatives, the credit alternatives arm of the JM Financial Group, has raised INR 160 crore IAN TIES UP WITH INDIFI TO PROVIDE DEBT FUNDING from Indian investors in the first close of its maiden FOR STARTUPS distressed opportunities fund. The fund is aiming to Indian Angel Network (IAN), in partnership with Indifi raise INR 500 crore and will invest to build a portfolio Technologies, has announced the launch of a Growth with downside protection. Stage Debt Fund to help IAN portfolio companies get The JM Financial Yield Enhancer (Distressed working capital. The move is aimed to provide growth Opportunity) Fund – I is a Category II AIF and was set up debt capital to support startups to pull through the in July last year after receiving requisite approval from slowing economy and continue their business SEBI. It is a sector-agnostic fund with its core investment operations. The fund will provide support to startups in strategy aligned with the macro-economic scenario. the business of Saas, direct-to-consumer online brands, enterprise services, edutech, digital media/ advertising Link here. driven businesses and leasing businesses. ARKAM VENTURES RAISES INR 325 CRORE FROM SIDBI, Start-ups will be able to avail INR 10,00,000 to INR CAPRIA, OTHERS 2,00,00,000 which will be a pure debt play based on the Homegrown venture fund Arkam Ventures, previously revenue pattern of the business and will benefit start- known as Unitary Helion, has received commitments of ups with no equity dilution or other equity-related rights INR 325 crore for its fund of INR 700 crore to invest in for the lender. early-stage technology start-ups. The new fund’s Link here. investors include Small Industries Development Bank of India (SIDBI), Capria, an American investment firm, and DRAPER VENTURES LAUNCHES SEED-STAGE entrepreneurs including Flipkart co-founder Binny INVESTMENT PLATFORM IN INDIA Bansal and Paytm founder Vijay Shekhar Sharma. The Draper Start-up House has launched its seed-stage remaining fund, of about INR 375 crore, is expected to investment syndicate platform, Draper Venture close by the end of this FY. Syndicate Network, in India. Draper Start-up House will

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look to create syndicates that will make seed and angel Aion had of USD 660 million investments across sectors, leveraging its global as of March 31 and offered a net internal rate of return network of investors. The Draper Venture Network will of 5%, as depicted by its filings. ICICI Venture’s exclusive also invest, through its partner funds, or its San partnership with Apollo had matured and the two Francisco-based Draper University Fund. parties agreed to change their relationship from April 1. While Apollo will advise Aion on investments until the While largely sector-agnostic, the focus will, however, end of the fund’s term, the U.S. firm and ICICI Venture primarily be on technology-enabled businesses, with will be free to independently pursue other certain segments such as ed-tech, healthcare, mobility opportunities. and future of work, cryptocurrencies, micro-mobility and sustainable technologies, likely receiving more Link here. interest. FLIPKART STAKE SALE: TIGER GLOBAL TO MOVE COURT Link here OVER DENIAL OF TAX RELIEF

MICROSOFT'S VENTURE FUND SETS UP INDIA OFFICE IN Private equity firm Tiger Global is set to drag the BANGALORE revenue department to court, after quasi-judicial body Authority of Advance Ruling (“AAR”) refused to grant Microsoft's venture fund M12 has set up an office in relief over taxability of its INR 14,500 crore sale of Bengaluru to help pursue investment opportunities Flipkart stake to Walmart. Tiger Global entities had across the region. The focus will be on B2B enterprise approached the AAR after the Income Tax Department software start-ups in the sectors of applied artificial rejected their application seeking benefits under the intelligence, business applications, infrastructure, India-Mauritius Double Tax Avoidance Agreement. The security and vanguard technologies. authority held that the Mauritius-registered companies Formerly known as Microsoft Ventures, M12 is looking were only “see-through entities” to avail of the benefits to invest in the Series A through Series C funding stages, under the tax treaty and indicated that the real targeting both local and cross-border solutions. beneficiary was the US firm.

Post-investment, the start-ups in M12's portfolio can Tiger Global is looking to challenge the AAR decision in elect to work with the fund's Portfolio Development the Delhi High Court. It is likely to argue that the team. investment arms were not liable to pay tax in India, were protected under the Mauritius treaty and must get the M12's portfolio companies are actively supported “grandfathering” benefit. AAR ruling based on other tax through connections to Microsoft's go-to-market regulations, such as on indirect transfer of shares and resources, access to Microsoft technology and internal the General Anti Avoidance Rule (“GAAR”). Tiger has thought leaders, co-marketing opportunities, and hired Mumbai-based law firm Nishith Desai Associates engagement with engineering teams to explore product along with a couple of tax firms to advise it on this issue. integrations. Tiger Global could also challenge AAR’s stand as one Link here. that could lead to retrospective tax, since it applied tax I-VEN, APOLLO GLOBAL TO END SPECIAL SITUATIONS regulations which were non-existent when the FOCUSED JV investments were made. Tiger Global entities could also argue that some of the principles of GAAR were applied Inc. which is seeking to start on the transaction. its own credit investment business in India, is to end its joint venture with the ICICI Venture, Aion Capital Link here. Partners. The New York-based firm plans to stop putting BEENEXT RAISES USD 110 MILLION VC FUND FOR new money into Aion and exit its existing investments INDIA, SE ASIA over the next few years. Singapore-based venture capital firm Beenext has raised its new ‘Emerging Asia Fund’ of USD 110 million (INR 834

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crore). Beenext will allocate around 50% of the new to reduce the impact of climate change. The new fund fund for Indian start-ups while the rest will be deployed will be called "The Climate Pledge Fund" and will invest across Southeast Asia. in companies across industries such as transportation, energy generation, battery storage, manufacturing and The latest fund will invest across sectors like e- food and agriculture. commerce, fintech, health-tech, agri-tech, edu-tech and artificial intelligence. Link here.

Link here. ANGELLIST LAUNCHES CAP TABLE MGMT PLATFORM EQUITYLIST FOR INDIAN START-UPS DFC INVESTS USD 30 MILLION IN GEF’S SOUTH ASIA GROWTH FUND AngelList has launched a cap table management product for India Equity List. In addition to enabling and US International Development Finance Corporation automating cap table management, the product will (DFC) is to invest USD 30 million in South Asia Growth also help start-ups create stock option programs and Fund II (promoted by Global Environment Fund or GEF) issue grants. to support businesses in the energy, water and food sectors across India. The fund aims to promote EquityList has partnered with legal and finance firms sustainable access to and the efficient use of these such as Nishith Desai, Veritas, and Burgeon to build a resources. free document generator for Employee Stock Option Programs (ESOPs). This feature will help start-ups Link here. generate grant letters, e-signatures and automated AMAZON TO LAUNCH USD 2 BILLION FUND FOR CLEAN reporting and the product will also allow employees to ENERGY use the calculator tool to model the cost of exercising options. Amazon.com Inc will launch a USD 2 billion venture capital fund that will focus on technology investments Link here.

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TOP DEALS

PRIVATE EQUITY DEALS Limited’s (“RIL”) Jio Platforms It picked up a total stake of 2.08% in Jio Platforms (“Jio”). CHANGES IN VOLUME AND QUANTUM OF PRIVATE EQUITY DEALS The investment values Jio at an equity value of INR 4.91 lakh crore and an enterprise value of INR 5.16 lakh The table below depicts changes in volume and crore, and will translate into a quantum in private equity deals in various sectors in the quarter ended June 2020 as compared to the previous Jio includes RIL’s digital businesses, including telecom quarter. It is evident that private equity activity in services of Jio Infocomm (mobile and broadband), Jio’s sectors such as finance, industrial, utilities has suite of apps, digital investments (KAI-OS, Reverie, decreased considerably. However, sectors such as Haptik) and technology capabilities such as big data, telecommunications, healthcare and consumer staples internet of things and artificial intelligence. have garnered increased investor attention. Link here.

PE/VC Deal Count VISTA EQUITY PARTNERS BUYS 2.32% STAKE IN JIO Consumer staples FOR INR 11,367 CRORE Telecommunications Industrials US based private equity firm Vista Equity Partners Healthcare (“Vista”) acquired a stake of 2.3% in Jio for an Finance investment of INR 11,367 crore. This investment by Vista Consumer Discretionary Information Technology maintains the valuation of the company at an equity value of INR 4.91 trillion and an enterprise value of INR 0 20 40 60 80 100 120 140 160 180 5.16 trillion. Quarter ended June 2020 Quarter ended March 2020 The proceeds of the investment are to be applied to redeem preference shares issued by RIL, helping it to PE/VC Deal Value (USD mn) achieve its goal of being debt free. Consumer staples Telecommunications Both Vista and Silver Lake are known for their Industrials investments in enterprise software, data, and Healthcare Finance technology-enabled organizations. Consumer Discretionary Information Technology Link here. GENERAL ATLANTIC INVESTS 6,598.38 CRORE IN JIO 0 2000 4000 6000 8000 10000 12000 PLATFORMS Quarter ended June 2020 Quarter ended March 2020

Private equity firm General Atlantic invested INR 6598.3 *This analysis is based on the information reported by KNAV crore in Jio Platforms for a 1.34% stake. The investment quarterly updates. is consistent with the valuation of Jio Platforms in earlier SILVER LAKE INVESTS INR 10,202.5 CRORE IN JIO deals with Silver Lake and Vista. PLATFORMS Genereal Atlantic had around USD 34 billion in assets In addition to the INR 5,655.75 crore of investment under management as of March 31. Its portfolio already made by Silver Lake on May 4, 2020, Silver Lake includes ventures like Airbnb, Alibaba, Ant Financial, made an additional investment of INR 4,546.8 crore in Box, ByteDance, Facebook, Slack, Snapchat and Uber. Its

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major investments in India include BYJU’s, PNB Housing Honeywell Venture Capital and Finance, Mu Sigma and IIFL Wealth Management. are also investing USD 5 million each by subscribing to 20,438 CCPS each. Existing investor SAIF Partners will be Jio Platforms also raised funds from 6 other private bringing around USD 4.5 million as part of this funding equity firms and sovereign funds, namely Omicron Asia round. Holdings, PIF, Mubadala Investment Co, Tarrant Capital IP, TPG Capital, and L Catterton Management Limited. Link here. Thus, the total private equity investment in Jio Platforms CARLYLE TO ACQUIRE 20% STAKE IN PIRAMAL'S stands at USD 9,574 million for a stake of 14.70%. PHARMA BUSINESS FOR INR 3,700 CRORE Link here. Global private equity major will SOFTWARE AS A SERVICE START-UP POSTMAN HAS acquire 20% stake in Piramal Group’s pharmaceutical RAISED USD 150 MILLION IN ITS SERIES C FUNDING business for INR 3,700 crore. The Carlyle Group through ROUND its affiliated entities and investment funds has agreed to acquire a 20% stake in Piramal Pharma Limited, a led the funding round at a valuation of wholly-owned subsidiary of Piramal Enterprises Limited USD 2 billion, and also joined by existing investors Nexus comprising of the company's pharmaceutical Venture Partners and Charles River Ventures, which had businesses. The stake sale is proposed to be done together invested USD 50 million into the company in through fresh equity issuance and the estimated equity June 2019 at a valuation of USD 350 million. The capital investment for Carlyle’s 20% stake in Piramal company has raised an investment of USD 208 million Pharma would amount to USD 490 million (INR 3,705.8 across various funding rounds. crore). Link here. The deal will include Piramal Pharma Solutions, an end- SIRIONLABS RAISES USD 44 MILLION IN SERIES C to-end contract development and manufacturing FUNDING ROUND business; Piramal Critical Care, a complex hospital generics business selling specialized products across SirionLab has received an investment of USD 44 million over 100 countries; Consumer Products Division, a in a new financing round for its expansion plans and consumer healthcare business selling over-the-counter handling increased client demand. It provides contract products in India; and Piramal Enterprises Limited’s management software to enterprises. investment in the joint venture with Allergan India, The start-up’s Series C round was led by Tiger Global and engaged in the ophthalmology in the domestic market Avatar Growth Capital. The company has raised USD 66 and Convergence Chemicals Private Limited. million to date. This round valued the start-up at about Link here. USD 250 million. Indian fund Avatar is known for investing in SaaS start-ups in India. Tiger Global has also CARLYLE GROUP ACQUIRES A MAJORITY STAKE IN been investing in this space recently. SEQUENT SCIENTIFIC LIMITED

Link here. The Carlyle Group announced that it has agreed to acquire an equity stake of up to 74% in SeQuent FAREYE RAISES USD 24.5 MILLION IN SERIES D Scientific Limited (“SeQuent”) through one of its FUNDING affiliated entities. It intends to acquire a majority stake FarEye, a logistics start-up operated by RoboticWares in SeQuent through share purchase agreements, at an Private Limited, is raising USD 24.5 million (around INR issue price of INR 86 per share. 185 crore) in its Series D funding round led by SeQuent is the largest pure-play animal healthcare Microsoft’s corporate venture fund, M12. company in India. SeQuent provides animal health M12 is investing USD 10 million by subscribing to 40,866 active pharmaceutical ingredients, formulations, and compulsorily convertible preference shares (“CCPS”). analytical services across 100 countries, employing

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1,700 personnel and manufacturing operations in India, M&A Deal Value (USD mn) Spain, Turkey, Germany and Brazil. Utilities Link here. Consumer staples Telecommunications Industrials CAPITAL INTERNATIONAL BUYS 3% STAKE IN INTAS Healthcare PHARMACEUTICALS FOR USD 107 MILLION Finance Consumer Discretionary Capital International Private Equity Fund (“Capital Information Technology

International”) acquired a stake of about 3% in Intas 0 1000 2000 3000 4000 5000 6000 7000

Pharmaceuticals Limited (“Intas”) for USD 107 million Quarter ended June 2020 Quarter ended March 2020 (INR 690 crore) from ChrysCapital LLC. The transaction values Intas at around USD 3.5 billion (INR 23,000 crore). *This analysis is based on the information reported by KNAV ChrysCapital, which earlier had a 6% stake in Intas, will quarterly updates. continue to hold its remaining stake. FACEBOOK TO ACQUIRE 9.9% STAKE IN JIO Capital International is part of the Capital Group, one of PLATFORMS VIA NEW ENTITY JAADHU HOLDINGS the world’s largest investment management companies Mark Zuckerberg’s Facebook Inc. will invest INR 43,574 with over USD 1.4 trillion in assets under management. crore in RIL unit Jio for a 9.99% stake, a deal meant to Intas, having an annual revenue of more than USD 1 help RIL reduce debt and strengthen the Facebook’s billion, is at tenth rank in the Indian pharmaceutical presence in India, especially for its WhatsApp unit. market, with a market share of 2.8%. The transaction valued Jio at INR 4.62 lakh crore. Jio, Link here. Reliance Retail and WhatsApp have also signed an M&A DEALS agreement to cross-utilize ecommerce platform JioMart and WhatsApp, to grow both businesses. CHANGES IN VOLUME AND QUANTUM OF M&A DEALS Link here. The table below depicts changes in volume and quantum in M&A deals in various sectors in the quarter UVARC ACQUIRES AIRCEL PURSUANT TO RESOLUTION ended June 2020 as compared to the previous quarter. PLAN UNDER INSOLVENCY AND BANKRUPTCY CODE It appears that there has been decreased activity in The National Company Law Tribunal, Mumbai Bench has various sectors such as information technology, finance, approved an INR 6,630-crore resolution plan proposed healthcare, industrials, consumer discretionary and by UV Asset Reconstruction Company Limited (“UV utilities. Meanwhile, sectors such as ARC”), proposed to be primarily funded through zero- telecommunications and consumer staples have coupon optionally convertible debentures. UV ARC attracted increased investor attention. intends to rebuild Aircel as a low capex business and intends to sell off its monetisable assets such as M&A Deal Count spectrum. Utilities Consumer staples Link here. Telecommunications Industrials NCLT NODS CARVAL'S INR 2,300 CRORE BID FOR Healthcare Finance UTTAM VALUE STEEL, UTTAM GALVA METALLICS Consumer Discretionary Information Technology The National Company Law Tribunal, Mumbai Bench approved the sale of Uttam Value Steel Limited and 0 10 20 30 40 50 Uttam Galva Metallics to a joint consortium of CarVal Quarter ended June 2020 Quarter ended March 2020 Investors and Nithia Capital Resources Advisors for INR 2,300 crore. The resolution plan would enable lenders

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to recover about 40% of their claims for both the ADANI PORTS TO ACQUIRE 75% STAKE IN companies. KRISHNAPATNAM PORT FOR INR 13,572 CRORE

Link here. Gautam Adani-led Adani Ports and Special Economic Zone (“APSEZ”) announced that it will acquire a majority HUL ACQUIRES HORLICKS INTO ITS PORTFOLIO IN DEAL stake in Krishnapatnam Port Company (“KPCL”) from WITH GSK Hyderabad-based CVR Group for INR 13,572 crore. Hindustan Unilever Limited (“HUL”), the Indian unit of KPCL operates in the business of handling containers, Unilever PLC, will merge GSK Consumer Healthcare coal, break bulk and other bulk cargo including liquid within itself in an all stock deal that will give HUL access cargo. KPCL is a multi-cargo facility and handled around to Horlicks, Boost and Maltova malted drinks brands as 54 million metric tonnes of cargo in FY 2018-19. well as distribution rights for a five-year period over over-the-counter and oral care brands such as The purchase consideration will primarily be routed Sensodyne, Eno and Crocin. through internal accruals and existing cash balance, it stated. The merger values GSK Consumer Healthcare at INR 31,700 crore and its shareholders will get 4.39 shares of APSEZ announced that the investment is consistent with HUL for each of their share. Post the merger, which is its strategy to increase its footprint in Andhra Pradesh, expected to be completed within a year, Unilever PLC’s adding that this acquisition will fasten APSEZ's goal holding in HUL will decrease from 67.2% to 61.9%. GSK towards 400 MMT by 2025. PLC will become the second-largest shareholder in the Link here. merged entity with a stake of 5.7%. NTPC TO ACQUIRE THDC & NEEPCO FOR INR 11,500 Link here. CRORE GMR GROUP CONCLUDES DEAL WITH GROUPE ADP NTPC Limited, India’s largest power generation utility, FOR 49% STAKE SALE IN AIRPORT ARM announced the INR 11,500 crore acquisition of Infrastructure major GMR Group recently concluded a hydropower firms THDC India Limited (“THDC”) and deal to finalise 49% stake sale in its airport unit, GMR North Eastern Electric Power Corporation Limited Airports Limited (“GAL”), to Paris-based Groupe ADP (“NEEPCO”), as a part of the government’s ongoing (“ADP”) As per the revised share purchase agreement, asset-sale exercises. Groupe ADP's second tranche of the investment for It announced that has signed sales purchase agreements picking up 24.01% stake in GAL has been structured in for acquiring 74.49% in THDC for INR 7,500 crore and a two parts. 100% acquisition of NEEPCO for INR 4,000 crore GMR Group had in February stated that ADP would buy respectively. a 49% stake in GAL for INR 10,780 crore. At the time of The transfer of these public sector units along with their that announcement, ADP had paid INR 5,248 crore in management control is a necessary part of an ongoing the first tranche for acquiring stake in GAL. ADP has now consolidation exercise of state run hydropower firms, paid INR 4,565 crore in the second tranche. and also forms an essential part of the government GAL currently operates Indira Gandhi International meeting its disinvestment target for 2019-20 of INR Airport in New Delhi, Hyderabad's Rajiv Gandhi 65,000 crore. International Airport and Mactan Cebu International Link here. Airport in partnership with Megawide in Philippines. ADP is in the business of developing and managing CCI APPROVES EMAMI CEMENT ACQUISITION BY airports, including Paris-Charles de Gaulle, Paris-Orly NIRMA ARM and Paris-Le Bourget.

Link here.

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CCI has approved the acquisition of Emami Cement Limited (“Emami”) by Nuvoco Vistas Corp Limited (“Nuvoco”), part of the Nirma group.

Emami group had signed an agreement in February with

Nuvoco for the divestment of its 100% equity stake in Emami Cement Limited for an enterprise value of INR 5,500 crore. The sale of the cement business is an essential step towards Emami group’s plan to be debt- free.

Emami Cement Limited operates an integrated cement plant in Risdah, Chhattisgarh, and grinding units in Bihar, West Bengal and Odisha, running at a total installed capacity of 8.3 million tonnes per annum. It also operates mining leases in Chhattisgarh, Rajasthan and Andhra Pradesh.

This counts as Nirma group’s second cement acquisition in east India. In 2016, Nirma group had acquired Lafarge

India’s cement asset.

Link here.

FRENCH ENERGY MAJOR TOTAL INVESTS INR 3,707 CRORE IN JOINT VENTURE WITH ADANI GREEN ENERGY

French energy major Total SA (“Total”) and Adani Green Energy (“Adani Green”) announced that Total has invested a sum of around INR 3,707 crore for 50% partnership with Adani Green to form a joint venture proposed to hold 2.148 gigawatts of operating solar power projects across 11 Indian states.

Adani Green had entered into an agreement with Total for an investment in 50% stake in a solar power joint venture that would hold operating solar power projects of the former.

Adani Green is the clean energy unit of the Adani group. It intends to increase its generation capacity to 25 gigawatts by 2025. Adani Green presently has a project portfolio of 6 gigawatts including projects that are under construction.

Link here.

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