Anyone who has a home loan is always looking for ways to pay it faster of lower the interest burden. As we know that at the start of the home loan the interest burden is highest and most part of EMI you pay in the initial years goes towards interest component. Whenever the interest rates are on a downward trend as it has been in last 3-4 years in India, the banks and housing finance companies try their best to attract the existing customers of other lenders for balance transfer at attractive rates. What is Balance Transfer and why it is attractive? Balance transfer is simple as its sounds ..read more

The Indian startup scene is hot despite the pandemic. There is continued flow of VC money along with the strategic investors which are now chasing Indian startups. There has been slew of transactions recently with almost $700 million raised by Indian startups in one week of March 2021 as per this report of Inc42. So if you are an Individual or a small Investor either abroad or in India thinking of participating in the Indian startup market, this post will highlight the key areas that you should keep in min while taking that decision. Some part of this post will focus on foreign investors as ..read more

The Indian government is getting forward to outlawing cryptocurrency trade, mining, and investments in the nation. It also includes the much-discussed Bitcoin and other widely used crypto-currencies. A proposed bill has also been introduced to that effect. On 9 February 2021, Finance Minister Nirmala Sitharaman announced in the Rajya Sabha that an authoritative Inter-Ministerial Committee (IMC) has been formed under the Chairmanship of the Secretary (Economic Affairs). The motive of the board will be to review the issues concerning cryptocurrencies and recommend actions that will ban the use ..read more

Many startups in India these days want to engage external experts including International experts as they possess special technical knowledge either related to a geographical area or related to a particular field. Many of these experts are interested in receiving the equity of the Indian startup in lieu of their services or a combination of cash and equity remuneration. Problem Problem arises as the Indian Companies Act, 2013 (Companies Act) and the Foreign Exchange Management Act, 1999 (FEMA) don’t allow issuance of ESOPs to any person that is not a permanent employee of the Company. So t ..read more

In any M&A transaction one of the key document is a disclosure letter which is issued by sell side as a qualification to the representation and warranties provided by the sell side to the buy side. It is basically extinction of the legal concept of caveat emptor i.e. ‘let the buyer beware’. The US practice is of having an integrated disclosure schedule within purchase agreement. However, Indian and the UK practice is to have a separate disclosure letter. In India, at least, disclosure letter is considered to be more beneficial from confidentiality perspective – as many a times the purchase ..read more

In open offer transactions the floor price for the open offer has to be determined based on the criteria provided under the Takeover Regulations and a certificate needs to be obtained from a CA confirming the calculation of the floor price. Following is the format for the floor price certificate: To Acquirer [insert name of the company] [insert address] Subject: Floor price certificate in relation to the proposed open offer of ABC Limited [insert name of listed company] (“Company”) Dear Sirs,  We have received your request for providing a certificate for computing the floor price of the ..read more

How Finance Works by Mihir A. Desai, Harvard Business Review Press (Deeper your understanding of Finance) While everyone is at home currently it would be great to upgrade your skills. Finance has always been an intimidating area for lot of people including lawyers and even people in mid to senior management who don’t have finance background or accounting education. Professor Mihir A Desai of Harvard has actually converted one of his Harvard Business School Online course into How Finance Works. Professor Desai teaches at Harvard Business School and Harvard Law School and is a leading scholar of ..read more

The Ministry of Finance of India notified Foreign Exchange Management (Non-debt Instruments) Amendment Rules, 2020 (Amended Rules) as per which the any entity of a country which shares borders with India shall not make investments in India without government approval. Since 1991 and specifically post the introduction of the Foreign Exchange Management Act, 1999 (FEMA) India has progressively move towards a more open exchange control regime where most of the foreign investments in India are under automatic route other than few strategic sectors. This action has been definitely taken in view of ..read more

Indemnity clause are one of the most negotiated clause in the purchase agreement in relation to a M&A transaction. Although it has become a norm to have an indemnity clause in the share purchase agreement but still many times starting of negotiating position of the parties is not to provide indemnification to the other party. Parties that are more experienced in M&A always know that indemnification will be asked. Indemnification clause is basically a separate contract for indemnity by which the party that is providing the indemnity (indemnifying party) agrees to pay for any losses ..read more

Reserve Bank of India on May 31, 2018 issued the notification to announce roll back the exemption provided to government owned NBFCs. The Government NBFCs were exempt from complying with following: (i) Sections 45-IB and 45-IC of the RBI Act, 1934 i.e maintenance of percentage of assets and reserve funds. (ii) Master Direction – Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 and Master Direction – Non-Banking Financial Company – Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Dir ..read more