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July 03, 2018

Legal Capsule: General Data Protection Regulation: Impact on India-based businesses by Economic Laws Practice

General Data Protection Regulation (“GDPR”), approved and adopted by European Parliament in April 2016, is a ‘rights based’ data protection model which allows the users to have greater rights over his/her data.  This came into force on May 25, 2018 GDPR and is today an important topic for most businesses, given the extra-territorial reach of these regulations. This article explores some of the key facets of GDPR and highlights pertinent points.


  • Applicability:Primarily, GDPR lays down rules in relation to protection of natural persons with regard to their personal data. The GDPR is applicable not only to organisations located within the European Union (“EU”), but also applies to organisations located outside of the EU if they ‘process’ personal data of EU subjects as a ‘controller’ or a ‘processor’, and where the processing activity relates to (a) offering of goods or services (including for free) to data subjects in EU; or (b) monitoring theirbehaviour if the behaviour takes place within EU.
  • Processing of personal data:‘Processing’ in the context of GDPR means any operation or set of operations which is performed on personal data or on sets of personal data, whether or not by automated means, such as collection, recording, organisation, structuring, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, restriction, erasure or destruction.
  • Data Protection Principles: GDPR lays down specific data protection principles for processing of personal data. Each ‘controller’ and ‘processor’ needs to ensure that the personal data is (a) processed lawfully, fairly and in a transparent manner, (b) collected for a specific, explicit and legitimate purpose, (c) adequate, relevant and necessary in relation to the purposes for which it is collected, and (d) accurate and is kept up to date. There is not only a requirement to comply with the prescribed principles but the ‘controller’ should be able to demonstrate the compliance.
  • Obligation to comply with GDPR: The obligation to comply with the above principles is not only on the entity collecting personal data of EU subjects but also the entity which stores, transmits, alters, uses such personal data on behalf of the data controller.
  • Lawful data processing under GDPR: Data processing will be considered lawful under GDPR if the data subject has given consent to the processing of personal data for one or more specific purposes. But mere consent of the data subject is not sufficient. The controller shall be able to demonstrate that the data subject has provided the consent. The request for consent by the controller shall be presented in a manner which is clearly distinguishable from other matters, in an intelligible and easily accessible form, using clear and plain language.[2] The data subject shall also have the right to withdraw his/her consent at any time, and it shall be as easy to withdraw consent as it is to give consent.
  • Sensitive personal data: Information which is considered specifically sensitive such as racial or ethnic origin or physical or mental health condition etc. cannot be obtained, stored, transmitted, processed, unless explicit consent for processing of such personal data has been provided by the data subject for one or more specified purposes.

Thinking Ahead to Minimize Exposure And Liabiities


Key takeaways for India-based organisations


The world’s 500 biggest corporations are on track to spend a total of $7.8 billion to comply with GDPR, according to consultants Ernst & Young.[3] In light of the significant compliance cost and burden, companies need to start thinking about the impact on their business model and pricing strategies.

GDPR provides the data subjects greater access to ascertain the manner in which their data is processed. Each controller is now required to maintain a record of processing activities under its responsibility and there are stringent conditions prescribed for notification of the personal data breaches. Given the strict compliance norms and the quantum of penalty involved, it has become imperative for organizations to have dedicated teams for ensuring ongoing GDPR compliance.

GDPR’s extra-territorial application could potentially have a significant impact on Indian organisations, making it critical for companies to analyseand assess whether GDPR is applicable to them. The sectors which are most likely to be affected are IT and ITeS services, business process outsourcing (BPO) units, e-commerce companies catering to customers in EU etc. 


Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

July 02, 2018

Legal Capsule: Emerging Trends & Issues under the Insolvency & Bankruptcy Code, 2016 by Economic Laws Practice

India’s jump from Rank 130 to 100 in World Bank’s ease of doing business rankings can be largely attributed to various legal reforms in the country, including the Insolvency and Bankruptcy Code, 2016 (“IBC”), which has been notified with a vision to resolve the rampant insolvency situation.

IBC essentially provides for revival of insolvent corporate entities through a corporate insolvency resolution process (“CIRP”) in a time bound manner, failing which such entities undergo liquidation. Over the past one and half years, IBC has proved instrumental in addressing the corporate insolvency situation in the country. However, several crucial issues have emerged under IBC framework. With a view to address some of those issues, the Government of India promulgated the Insolvency and Bankruptcy (Amendment) Ordinance, 2018  (“2018 Ordinance”) on 6 June 2018. Despite this move, certain issues still remain unresolved and require proper analysis. A few critical points are discussed below.

  • In practice, is the process time-bound? Even though IBC lays down that the CIRP has to be concluded within a period of 270 days (including an extension of maximum 90 days), the adjudicating authorities under IBC, namely the National Company Law Tribunal (“NCLT”) and the appellate body, National Company Law Appellate Tribunal (“NCLAT”), across various jurisdictions have started to allow exclusion of certain days from computation of this period ‘if the facts and circumstances justify such exclusion’, largely due to increased litigation on various unsettled issues under IBC. The NCLAT has also laid down a few grounds as illustrations for claiming such exclusion (for example, if CIRP is stayed, or resolution professional is not functioning). This has made strict adherence to the timelines contemplated under IBC a practical challenge. The press release issued by the Government  with respect to the 2018 Ordinance stated that further clarity would be brought about vide regulations laying down mandatory timelines, processes and procedures for CIRP by addressing some of the specific issues including non-entertainment of late bids, no negotiation with the late bidders and a well laid down procedure for maximizing value of assets. The existing regulations,once amended, to bring in place the proposed strict timelines will need to be examined.

  • Is the Limitation Act, 1963 applicable to proceedings under IBC? The law relating to limitation of suits and other legal proceedings is covered under the Limitation Act, 1963 (“Limitation Act”). IBC earlier did not clearly set out whether the Limitation Act was applicable to the proceedings under it. Though NCLAT had in the matter of Speculum Plast Private Limited. v/s PTC Techno Private Limited (Speculum Case) held that the Limitation Act was not applicable to the proceedings under IBC, an appeal was referred to the Supreme Court. Pending the appeal, the 2018 Ordinance has shed some light on this issue by making the provisions of the Limitation Act applicable to the proceedings under IBC. The status of various applications pending before the NCLTs and pending appeal before the NCLAT or the Supreme Court may need to be seen in view of this newly inserted provision, especially since the new provision does not clarify whether the pending applications are protected under this provision. Also, the status of various applications which could not be filed in light of the Speculum Case, needs to be clarified. Interestingly, the NCLAT in the Speculum Case had observed that even if the Limitation Act were to be made applicable to IBC, the period of limitation of 3 years as per the Limitation Act would begin to run from the date when the right to apply under IBC accrued, i.e. 1 December 2016 (when IBC was notified). If the NCLTs take a cue from these observations of the NCLAT, could it mean that virtually no application can be rejected on the grounds of expiry of limitation period until 1 December 2019 or 3 years from the date of enforcement (6 June 2018) of the 2018 Ordinance?

  • Obligations on the insolvency professional? IBC has provided various obligations upon an insolvency professional including keeping the corporate debtor as a going concern. In addition, the 2018 Ordinance has cast another responsibility for complying with the requirements under any law for the time being in force on behalf of the corporate debtor. In many instances, the regulator (Insolvency and Bankruptcy Board of India) has imposed penalties on insolvency professionals who have failed to comply with their obligations. However, as a practical matter, insolvency professionals (being individuals) may find it difficult to ensure strict compliance with IBC rules and regulations therein, as sole responsible persons appointed for the purpose. We may expect a change in the existing rules and regulations permitting a corporate body or a firm to be appointed as an insolvency professional to run the CIRP. Such an amendment would enable safeguarding and ring fencing the value of a corporate debtor under CIRP. 

  • Mandatory sale of shares of existing shareholders in a resolution plan? As per the provisions of IBC, a resolution plan may provide for the measures required for implementing it, including but not limited to the substantial acquisition of shares of the corporate debtor. It will be an interesting situation to see whether a contemplation in the resolution plan to require the sale of shares of an existing shareholder/promoter can be made binding against such shareholder/promoter, especially as IBC makes the resolution plan binding against the shareholders. In fact, IBC also provides that a provision in a resolution plan which would otherwise require the consent of the members or partners of the corporate debtor, under the terms of the constitutional documents of the corporate debtor, shareholders’ agreement, joint venture agreement or other document of a similar nature, shall take effect notwithstanding that such consent has not been obtained. These provisions seem to largely undermine the rights of the shareholders of the corporate debtor, especially when IBC has been introduced as a non-obstante law.

  • What are the difficulties in withdrawing an application under IBC? Until the 2018 Ordinance, the language under IBC did not specifically provide for withdrawal once a petition for initiation of CIRP against a corporate debtor was admitted. Many parties had explored the settlement options after their cases were admitted. The NCLAT and Supreme Court of India had also allowed withdrawal on a case-by-case basis, which led to plethora of litigations. The Supreme Court had been exercising its powers under Article 142 of the Constitution of India (which gives it the power to pass orders for doing complete justice) to allow withdrawal. The 2018 Ordinance now provides for withdrawal after admission of an application under IBC, subject to the approval of the Committee of Creditors (“COC”) with 90% of the voting share. Since the procedure for such withdrawal has not been laid down yet, it will be interesting to see whether this mechanism proves viable, in practice. Also, keeping such a high threshold for withdrawal may pose practical difficulties, especially for operational creditors who do not form part of the committee of creditors.

  • Whether moratorium is applicable to personal guarantor? IBC provides for applicability of ‘moratorium’ upon the admission of an application by the NCLT against a corporate debtor. The moratorium is essentially a period wherein no suits or proceedings for recovery, enforcement of security interest, sale or transfer of assets, or termination of essential contracts can be instituted or continued against a corporate debtor. However, whether personal guarantee of the corporate debtor can be invoked pending the proceedings under IBC and in the light of the moratorium, was a question that created a lot of stir. While the Allahabad High Court in Sanjeev Shriya v/s State Bank of India & Ors, and Deepak Singhania & Anr v/s State Bank of India, (“Sanjeev Shriya Case”) vide order dated 6 September 2017 had answered the question in negative, with the ratio that while the liability of guarantors is co-extensive, but the entire proceeding which is going on before IRP under IBC is still in fluid stage and for the same cause of action, two split proceedings cannot go simultaneously before the debt recovery tribunal as well as NCLT. The 2018 Ordinance has intended to resolve the confusion, by stating that moratorium shall not apply to the surety in a contract of guarantee to a corporate debtor. This move could, however, give rise to multiple parallel proceedings as certain creditors would choose to rather invoke the guarantee than wait for CIRP to conclude. This might also lead to reconstitution of many COCs which have already been formed. It will also be interesting to see how the guarantors parallelly run two proceedings in light of the ratio of Sanjeev Shriya case.

  • Whether operational creditors have any say in CIRP? As per IBC, the resolution plan requires approval from the COC which is constituted of financial creditors only even if there are operational creditors; however, in case there are no financial creditors, the COC comprises of operational creditors. There can be circumstances where a corporate debtor may have higher exposure of operational debt than financial debt – in such a scenario, it is not right to allow only the financial creditors to have the ability to adopt or reject a resolution plan.The 2018 Ordinance has in fact brought the allottees of any real estate project within the ambit of the “financial creditors”. Such allottees would also enjoy the rights available to a financial creditor such as forming a part of the COC and voting during the CIRP, but the operational creditors have been kept out of it.

  • Criteria for eligibility of ‘resolution applicant’: too stringent? With an aim to put in place certain safeguards to prevent unscrupulous, undesirable persons from misusing or vitiating the provisions of IBC, amendments have been made vide the Insolvency and Bankruptcy Code (Amendment) Act, 2018 and further by the 2018 Ordinance, to IBC to keep-out such persons who have wilfully defaulted, or are associated with non-performing assets, or are habitually non-compliant and, therefore, are likely to be a risk to successful resolution of insolvency of a company. However, the grounds for eligibility of such a resolution applicant have been made quite stringent – given that the amendment is new, and its effects are still being tested, there is an apprehension that it might become impractical for bona-fide resolution applicants to submit a resolution plan, thereby defeating the spirit of IBC for revival of insolvent corporate entities. The 2018 Ordinance however states that the eligibility criteria as amended thereunder shall apply to the resolution applicant who has not submitted a resolution plan as on 6 June 2018. It would mean that the eligibility criteria applicable to the resolution applicants who have already submitted a resolution plan would be different from the eligibility criteria applicable to the resolution applicants who are yet to submit a resolution plan vis-à-vis the same corporate debtor. This might lead to an unfair advantage to certain resolution applicants over the others, so far as their eligibility criteria is concerned.

  • Special resolution (75%) under Section 10 (suo-moto initiation of CIRP by corporate debtor)? Section 10 of IBC contains a provision whereby the corporate debtor itself can file an application for initiation of CIRP. This provision was earlier misused by certain promoters to avoid the attachment of their personal property which was secured against the loan facilities availed by the corporate debtor by obtaining an order of admission and hence moratorium. In order to rectify this shortcoming, the 2018 Ordinance has inserted a requirement of special resolution of the shareholders of the corporate debtors to trigger insolvency resolution under Section 10 of IBC. Given that this change is in nascent and has not been tested, in case of a typical joint venture structure (51%-49%), just one JV partner of a loss making JV may find it difficult to invoke the provisions of Section 10 of IBC for initiating CIRP.

Conclusion

IBC has brought about various welcome changes in the insolvency regime in India, such as incorporation of insolvency professional entities (“IPE”), through which both Indian and foreign insolvency professionals can provide services, thereby increasing the pool of talented and experienced insolvency professional in the country.  In fact, IBC also contemplates and contains provisions whereby the Indian Government can enter into bilateral treaties with other countries for application of IBC to assets or property situated outside India.  

Further, with a view to boost the micro, small and medium sector enterprises (“MSME”), the 2018 Ordinance has empowered the Government of India to provide a special dispensation under IBC. The immediate benefit it would provide is that, it would not disqualify the promoter to bid for his enterprise undergoing CIRP, provided he is not a wilful defaulter and does not attract other disqualifications not related to default. It has also empowered the Central Government to allow further exemptions or modifications with respect to the MSME Sector, if required, in public interest.

Though it is true that there are various gaps which need to be filled and various practical difficulties which need to be addressed under IBC, it has so far proved to be effective in meeting its purpose. As this law evolves, it is likely to further boost India Inc’s corporate governance practices and help the country optimally address the widespread problem of mounting corporate debt.


Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

June 30, 2018

Fintech emerges as the most favoured sector among VCs in Q2 2018

Fintech Companies grabbed 26% of all Venture Capital (VC) funding in the quarter ended June 2018 - 24 deals worth $81 million - compared to 11% in the immediate previous quarter. (Health tech investments had grabbed the top spot in Q1 2018.) Investments in Fintech were led by large investments in trade finance and factoring company Drip Capital and SME loan marketplace CoinTribe. Lending startups (12 investments worth $47 million) accounted for 50% of the Fintech investments.


Overall, VC firms made 92 investments worth $392 million in Q2’18, data from Venture Intelligence  shows. Investment value increased by more than 20% compared to Q2’17 as well as the immediate previous quarter (which registered investments worth $315 million). In volume (no. of deals) terms, the figure was 12% lower compared to the 104 deals worth $318 million recorded in Q2'17 and flat compared the immediate previous quarter (which registered 95 deals). Note: Venture Capital is defined by Venture Intelligence as Seed to Series D round investments in companies less than 10 years old with value of up to $20 Million.

Healthcare analytics startup SigTuple raised a $19 million Series B led by Accel India and IDG Ventures India. Tea chain Chai Point raised a $17.5 million Series C round led by Paragon Partners. B2B E-commerce company Bizongo raised $17 million as part of its Series B round, led by Eduardo Saverin’s B Capital Group and IFC.


By Sector

Tech companies attracted 80 investments (87% of the activity) worth $299 million during Q2’18. Of the 12 VC investments (worth $85 million) that went into non-tech companies, the largest were ChaiPoint (Tea Chain), X1 (Motor) Racing League, IndiQube (Co-working space) and WonderChef Home Appliances

Consumer focused companies grabbed 60% of the VC funding - 55 investments (worth $224 million) - in Q2’18, compared to B2B companies which attracted 37 investments (worth $168 million). Apart from the above companies, top investments in consumer companies include Meesho (Social Selling) and RailYatri (Content - Rail Travel).



E-Commerce grabbed 14 investments (worth $79 million), followed closely by Healthtech with 13 deals worth $26 million. 

Investments by City


VC Investments in Bangalore-based companies fell fell by 17% . Mumbai startups bounced back to equal with NCR attracting 23 investments. Coimbatore sneaked in at fourth place with two VC investments, after Chennai (5). Investments in other cities fell by 76%.


Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

June 28, 2018

Q2’18 is Biggest Ever for PE Investments in India at $8.2 B; up 60% YoY

With 24 investments worth over $100-M each, Mega Deals are back with a bang.

12 Deals over $200-M each account for 64% of the total investment value

Private Equity firms invested a record $8.2 Billion (across 158 deals) during the quarter ended June 2018 – up 60% compared to the $5.1 Billion (across 153 transactions) in the same period last year, according to early data from Venture Intelligence. The investment amount in Q2’18 was as much as 112% higher than the immediate previous quarter (which had recorded $3.9 Billion being invested across 157 transactions). Note: These figures include Venture Capital investments, but exclude PE investments in Real Estate.


The latest quarter witnessed 24 PE investments worth $100 million or more (accounting for almost 83% of the total investment value during the period) compared to just 10 such transactions in Q2’17, the Venture Intelligence data showed. Of these, 12 were larger than $200 million each (by themselves accounting for 64% of the total value) - compared to seven such investments in the year ago period. The latest figures takes the total PE investments in the first half of 2018 to $12.4 Billion (across 315 deals) – a figure similar to that recorded in first half of 2017 (across 358 transactions). (Calendar 2017 was the biggest ever year for PE investments in India, recording $23.5 Billion across 660 deals.)



The biggest PE investments reported during Q2’18 included the investment by Partners Group in outsourced IT product development firm GlobalLogic (via a secondary purchase from Apax Partners) for about $960 million, followed by Temasek’s contribution of about $760 million to the buyout of the L&T Electrical & Automation business by Schneider Electric.

By Industry


IT & ITeS companies accounted for 31% of the PE investment pie ($2.6 Billion across 83 deals), led by the GlobalLogic deal and included Temasek’s $250 million investment in another mature IT Services firm, UST Global. Internet & Mobile companies - Paytm E-Commerce ($450 million); PolicyBazaar ($236 million) and Swiggy ($210 million) – completed the list of Top 5 PE investments in Tech during Q2’18. Manufacturing companies, led by the L&T E&A Business, attracted 16% of the pie ($1.3 Billion across seven deals). Healthcare & Life Sciences companies (led by ChrysCapital’s $350 million investment in Mankind Pharma) accounted for 12% and Energy companies (led by the Greenko Group investment) for 10%. The share of BFSI companies slipped to less than 10% of the pie during Q2’18, despite attracting four investments of over $100 million – in IARC; AU Small Finance Bank; IndiaFirst Life Insurance and India Infoline Wealth.

Subscribers to Venture Intelligence products will be mailed the detailed quarterly reports shortly.


Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

June 27, 2018

Why IBC and other Big M&A Deals Take Forever to Close

Extracts from the recent Times of India article on the topic:


While shareholder activism, regulatory roadblocks and tightening of acquisition financing are among different reasons behind slow-moving M&As in the country, one key factor that stands out is the rise of desperate or compulsive deal-making.
...There is a struggle in marrying economic and regulatory interest in some cases. For instance, private equity firm General Atlantic's acquisition of share share registry Karvy Computershare has been waiting for nearly one year as Sebi decides on allowing financial investors control of market infrastructure institutions without adequate restrain.
...Deal-making under the Insolvency Insolvency and Bankruptcy Code - Binani Cement, Jaypee Infratech and Essar Steel - has witnessed high drama usually associated with Bollygarchs (a reference to big Indian industrialists wielding influence over social and political narratives) on the march, often putting lenders, resolution professionals and the National Company Law Tribunal on the back foot. Economic Laws Practice partner Darshan Upadhyay said, "We have not only seen changes and challenges, many of the matters have landed before judicial forums. Other regulations have not kept pace with the situation to have an integrated solution."

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

June 26, 2018

Legal Capsule: Enforcement of Foreign Awards in India: by Economic Laws Practice

India has over time acquired a reputation as a ‘difficult jurisdiction’ from an arbitration perspective, especially given heightened concerns on enforcement of foreign awards and the frequent judicial intervention from Indian courts under the Arbitration and Conciliation Act, 1996 (the “Act”).

The Arbitration and Conciliation (Amendment) Act, 2015 (“Amendment Act”) was an attempt by the Indian legislature to address many of these factors. This article explores some of the key issues for parties to consider to ensure a smooth enforcement process of foreign seated arbitration awards in India.
  • How does the seat of arbitration impact enforcement in India?

    While the Arbitration Act mandates that a foreign award can be directly enforced in India if it originates from a country which is a party to the New York Convention (Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958) and has been notified for reciprocal enforcement of awards by the Government of India, it is noteworthy that presently only 48 out of 196 signatory countries to the New York Convention have been so notified (for list of these countries, please refer to the annexure). Therefore, it becomes important for parties to ensure that their arbitration proceedings are seated in one of these 48 countries.
  • Which courts can arbitration proceedings be initiated in?

    In order to prevent foreign parties from being dragged to lower domestic courts while challenging international arbitration proceedings and awards, the new Act now clarifies that only the High Courts – which have better trained judges and are often in the capital cities of various states – will have jurisdiction to entertain court proceedings in relation to an international commercial arbitration. Thus, for purposes of enforcement of foreign awards in India, a party must only consider the jurisdiction of the High Court in which the judgement debtor or their assets are located. 
  • What is the procedure for filing of enforcement proceedings?

    In the case of Fuerst Day Lawson, Supreme Court of India has held that a sole execution application before the relevant High Court would suffice to cover the two-step process required for execution of the foreign award; i.e. (i) testing enforceability of the award in terms of sections 47 to 49 of the Act; and (ii) if the award was found to be enforceable, the procedure for execution of the award as a decree of the court. It must be noted that the execution application requires filing of the original or copy of the award (in English language), duly authenticated in the manner required by the law of the country in which the award was made, and the original or copy of the arbitration agreement, pursuant to which the arbitration was initiated. 
  • Can the enforcement of award still be challenged on the (infamous) ‘public policy’ ground?

    Once the application for executing the award is filed, enforcement of an award can be contested on the grounds enumerated at Section 48 of the Act. While many of these grounds are similar to those contained in the New York Convention, refusing enforcement on the ground that ‘enforcement of the award will be contrary to the “public policy” of India’ had emerged as the most contentious(and staple) method of resisting enforcement of arbitral awards in India. To address this, the Amendment Act has now clarified that an award can be held to be against “public policy” only if (a) the award suffers from fraud or corruption; (b) conflicts with the fundamental policy or Indian law or (c) conflicts with most basic notions of morality and justice. The Amendment Act has also clarified that when judging whether an award is against fundamental policy of Indian law, the courts will not review the merits of the dispute. Following suit, the Indian courts have now become quite strict in entertaining the “public policy” argument. In Cruz City  and NTT Docomo , the Delhi High Court while upholding the foreign awards (allegedly in violation of provisions of Foreign Exchange and Management Act, 1999), noted that the violation of specific provisions of an enactment is not synonymous with violation of public policy of India. Similarly, in the case of KandlaExport,  the Supreme Court has clarified that there is no statutory appeal allowed under the Act against an order enforcing foreign awards.
  • How can you secure an award during the pendency of a challenge to enforcement?  

    The courts have recently been willing to secure the amounts due from a judgment debtor under a foreign award, in order to ensure that the interests of award holders are protected pending enforcement. The Bombay High Court, in Aircon Beibars , secured the sums due under a foreign award pending enforcement while noting that ‘recourse to Indian courts for interim measures in relation to a foreign seated arbitration is a transitory provision and can be invoked pending enforcement of the foreign award’. Similarly, in TRAMMO DMCC , the Bombay High Court allowed the holder of a foreign award to apply for interim relief to a court which enjoyed jurisdiction over the assets of the judgment debtor. Additionally, any such remedies which are available in respect of a final award to a party are equally available in respect of any interim award, as Section 2(c) of the Act provides that “arbitral award” includes interim award.

Conclusion

The Amended Act is indeed a step in the right direction. The judiciary has also done its bit to uphold the intent of the legislature by passing several landmark orders recently that have fostered the faith of the parties in the enforcement process in India. 

There are still issues that remain, such as the debate on enforcement of emergency awards. As an example, the concept of emergency arbitrator has not been statutorily recognised in India even under the Amendment Act, even though institutional arbitration rules in India - Mumbai Centre for International Arbitration (“MCIA”) rules and Indian Council of Arbitration rules - provide for an emergency arbitration proceeding; however, it remains as yet untried whether courts in India will enforce an award granted by an emergency arbitrator in a domestic arbitration and the judicial position as of now remains that a suit may have to be filed for seeking enforcement of such awards by emergency arbitrator.

While scepticism continues to follow arbitration processes in India, there is definitely a positive trend towards easing the ability of foreign parties to enforce their contractual rights and allowing disputes to reach a conclusion by positive enforcement of arbitral awards.



Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

June 24, 2018

Legal Capsule: Corporate Governance in Listed Companies by Economic Laws Practice

The concept of corporate governance can be best described as a system of checks and balances within the corporate structure to facilitate long term value creation for stakeholders (and shareholders) due to the separation of ownership and management in companies. Sir Adrian Cadbury, in the UK Commission Report: Corporate Governance 1992 has correctly referred to ‘corporate governance’ being concerned with holding the balance between economic and social goals and between individual and communal goals. 

Evolution of Corporate Governance in India

The first reference to corporate governance in India’s legal framework can be found in the Companies Act, 1956. While our corporate governance norms have been developing over various years, the 2017 World Bank ‘Doing Business’ report ranks India at the 13th place in terms of minority protection, attesting to the progress made on this front in the recent years. 

The Satyam scandal in 2009, was a watershed moment in the history of governance regulation in India. Involving falsification of accounts by the top echelons of management and a fraud of over $1 billion dollars, this scandal motivated the Government of India to enact the Companies Act, 2013 which introduced wide-ranging changes to India’s corporate governance framework.

Evolution of Corporate Governance in India

(Click to view)
The LODR Regulations

The enactment of the 2013 Act brought about a shift from a voluntary approach to an ultra-mandatory approach towards corporate governance, with detailed governance norms being included in the primary legislation itself. Thereafter, the Listing Agreement was replaced by the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”), which dealt extensively with governance matters, replacing the regime under Clause 49 thereof. Based on core concepts of adequate, timely and accurate disclosures of material information to all stakeholders, equitable treatment of all shareholders, recognition of the role of all stakeholders in governance, effective board supervision of the management, the LODR Regulations prescribed standards of governance higher than that contained in the Companies Act, 2013, given that the interests of small, retail shareholders required additional protection from acts of the majority.


Conclusion

Corporate governance in India has indeed come a long way. While these developments will inevitably enhance the regulatory compliance burden on companies, this is undoubtedly an impressive array of measures when viewed from the lens of corporate governance. Gone are the days when investors (including shareholders) would shoot in the dark with respect to their investments, relying on hearsay and tip-offs from friends and family while praying that they are not taken for a ride by the promoters and management. In marked contrast, the Indian investor of today is sufficiently empowered by robust corporate governance norms to take informed decisions. With effective implementation of the evolving norms, the evolving next phase of corporate governance in India seems to be on a fitting course.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

June 21, 2018

Can Hike Recover from its Missteps?

Economic Times has an analysis on why and how Hike has seemingly lost the plot in India's high-stakes messaging battle ground. The article builds on the late May 2018 post by Hike founder Kavin Bharti Mittal that foretold the layoff of 25% of the Unicorn company's staff. Extracts:

In the last 18 months, Hike’s monthly active users (MAUs) have halved (37 million to 18 million) and its daily active users (DAU) diminished by two-thirds (23 million to 8 million), according to app intelligence service App Annie. 
...The common hypothesis within Hike was that a majority of its users were from tier IIIII (sic) towns and cities and those who could be classified as SEC B and C. But it failed to get the right market niche.   
...“For loyal users of Hike, people who love the product, there is use case for one person, say using it in hidden mode. And there exist multiple replicas of that one person. Ideally, Hike should have built around that audience, which is exactly what it didn’t do,” says the first person quoted in the story.
The article mentions the newer messaging app - the local language focused ShareChat - as having executed better than Hike. And that Hike might take the regional language route as well.

Or, maybe we can expect another VC-backed combination?

#HikeShareChatDeal anyone?

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

June 06, 2018

Chinese, Japanese funds bet big on India, doubled investments in two years: CNBCTV18

CNBCTV18 carried data from Venture Intelligence on PE-VC investments by Chinese and Japanese investors.


Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

June 01, 2018

Infrastructure sector sees growing foreign investor interest: Mint

A Mint article quotes Venture Intelligence data on PE/VC investments in infrastructure investments:

(Click to view)

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

May 23, 2018

SME IPO - An Emerging Route for VC Exits?

On the back of Blume Ventures-backed E2E Networks and RVCF-backed SoftTech Engineers pulling off strongly over subscribed IPOs, Venture Intelligence takes a look at how SME IPOs have fared as an exit route for Venture Capital firms.

Since their beginning in 2012, 400+ companies have listed on SME platforms. We believe that VC-backed B2B and SaaS companies have an edge over B2C companies in the the short to mid term given their profitability.

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Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

May 14, 2018

Venture Intelligence - Mint Deal Tracker (May 7, 2018)

Venture Intelligence is powering the Deal Tracker on The Mint - tracking Private Equity, Venture Capital, M&A, Real Estate and Strategic investments in India. The Deal Tracker is featured in the Deals Section (Page 3) every Monday.


For comprehensive coverage on upcoming PE/VC, M&A, Angel and Strategic Investments sign-up to our Daily/Weekly Newsletter. View a sample Deal Digest Newsletter here.


Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

May 07, 2018

Venture Intelligence - Mint Deal Tracker (Apr 30, 2018)

Venture Intelligence is powering the Deal Tracker on The Mint - tracking Private Equity, Venture Capital, M&A, Real Estate and Strategic investments in India. The Deal Tracker is featured in the Deals Section (Page 3) every Monday.


For comprehensive coverage on upcoming PE/VC, M&A, Angel and Strategic Investments sign-up to our Daily/Weekly Newsletter. View a sample Deal Digest Newsletter here.


Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

April 25, 2018

AZB tops Legal Advisor League Tables for Private Equity Deals in Q1 2018

SAM, NDA take no.2 and no.3 slots; AZB tops by deal volume too, followed by JSA and KCO


AZB & Partners topped the Venture Intelligence League Tables for Legal Advisors to Private Equity & Venture Capital deals in Q1 2018 advising deals worth $3.8 billion (across 21 deals) followed by Shardul Amarchand Mangaldas ($3 billion across 13 deals) and Nishith Desai Associates ($1.9 billion across 6 deals). Wadia Ghandy ($1.7 billion across 1 deal) and J Sagar Associates ($1.7 billion across 17 deals) came in at fourth and fifth respectively.

The Venture Intelligence League Tables, the first such initiative exclusively tracking transactions involving India-based companies, are based on value of PE and M&A transactions advised by Transaction and Legal Advisory firms. The tables also include Private Equity investments and exits in Real Estate advised by law firms.

AZB topped the tables by deal volume too advising 21 deals, followed by J Sagar Associates and Khaitan & Co. (advising 17 deals each). SAM took the third spot with 13 deals.

Top Deals

The top four firms acted as legal advisors to the $1.7 Billion investment by KKR, GIC and others in HDFC. HSA Advocates served as advisor to Macquarie's $1.5 Billion investment to operate toll projects under NHAI.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

AZB tops Legal Advisor League Tables for M&A Deals in Q1 2018

CAM, SAM take no.2 and no.3 slots; AZB tops by deal volume followed by KCO


AZB & Partners topped the Venture Intelligence League Tables for Legal Advisors to M&A deals in Q1 2018 advising M&A deals worth $11.6 billion (across 17 deals) followed by Cyril Amarchand Mangaldas ($9.4 billion across 10 deals) and Shardul Amarchand Mangaldas ($8.5 billion across 12 deals). Trilegal ($3 billion across 5 deals) and Khaitan & Co. ($2.2 billion across 16 deals) came in at fourth and fifth respectively.

The Venture Intelligence League Tables, the first such initiative exclusively tracking transactions involving India-based companies, are based on value of PE and M&A transactions advised by Transaction and Legal Advisory firms.

AZB topped the tables by deal volume with 17 deals, followed by Khaitan & Co. with 16 deals at second place. SAM took the third spot with 12 deals.

Top Deals

The top three firms acted as legal advisors to the HPCL - ONGC merger. AZB and CAM also served as advisors to the Fortis and Manipal Hospitals merger. 

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

April 24, 2018

EY tops Transaction Advisor League Tables for Private Equity in Q1 2018

Barclays, Citi, Deutsche Bank take second place; Unitus Capital and Masterkey Holdings top by deal volume


EY topped the Venture Intelligence League Tables for Transaction Advisor to Private Equity deals in Q1 2018 advising Indiabulls Properties in its sale of 50% stake to Blackstone acquisition for $730 million. Barclays, Citi and Deutsche Bank came in at second with $265 million advising the stake sale by Warburg Pincus, Abraaj and IFC in Continental Warehousing to DP World - NIIF platform. Kotak took the third spot advising $179 million (across two deals). CBRE and Axis Capital came in at fourth and fifth respectively.

Unitus Capital and Masterkey Holdings topped the tables by deal volume advising 4 deals, followed by Veda Corporate Advisors and KPMG in second place with 3 deals each.

Inclusive of its roles in due diligence and related advisory activities, KPMG topped by deal volume with 10 deals (worth $417 million).

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

Citi tops Transaction Advisor League Tables for M&A Deals in Q1 2018

SBI Caps, Kotak take no.2 and no.3 slots; EY tops inclusive of due diligence services


Citi topped the Venture Intelligence League Tables for Transaction Advisor to M&A deals in Q1 2018 advising M&A deals worth $6.1 billion (across two deals) followed by SBI Caps ($5.7 billion across one deal) and Kotak ($2.6 billion across two deals). Standard Chartered Bank ($2.2 billion across 2 deals) and Allegro Advisors ($1.9 billion across 3 deals) came in at fourth and fifth respectively.

Ernst & Young and KPMG topped the tables by deal volume advising 4 deals, followed by Allegro Advisors with 3 deals.

The Venture Intelligence League Tables, the first such initiative exclusively tracking transactions involving India-based companies, are based on value of PE and M&A transactions advised by Transaction and Legal Advisory firms.

Inclusive of its roles in due diligence and related advisory activities, Ernst & Young topped the League Table advising 9 M&A deals worth $8.9 billion.

Top Deals

Citi and SBI Caps advised the HPCL - ONGC merger. Allegro Advisors, Goldman Sachs, Kotak and Standard Chartered Bank advised the Fortis - Manipal Hospitals merger.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

April 18, 2018

Seed deals sprout as angels return to field: The Economic Times

An Economic Times article on Seed funding in India quotes Venture Intelligence data:

Data from Venture Intelligence shows that seed-stage investments by top VC firms since the start of 2017 have touched $144 million across 178 deals. Of this, $31 million was invested in just the first three months of 2018.
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

April 16, 2018

Made for Each Other: Indian Startups and Chinese Investors

A South China Morning Post article quotes Venture Intelligence data on the rising Chinese VC investments in India.
While Western venture capital firms still dominate the investment of India’s tech world, statistics show the influence of Chinese money is on the rise. Last year, at least 23 deals signed by Indian tech start-ups involved Chinese investors, according to market research firm Venture Intelligence. By contrast, the figure was only eight in 2015. 

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

Venture Intelligence - Mint Deal Tracker (Apr 9, 2018)

Venture Intelligence is powering the Deal Tracker on The Mint - tracking Private Equity, Venture Capital, M&A, Real Estate and Strategic investments in India. The Deal Tracker is featured in the Deals Section (Page 3) every Monday.


For comprehensive coverage on upcoming PE/VC, M&A, Angel and Strategic Investments sign-up to our Daily/Weekly Newsletter. View a sample Deal Digest Newsletter here.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

April 10, 2018

Indian auto component makers are hungry for overseas acquisitions: Mint

A Mint article quotes Venture Intelligence data on M&A in the Auto components sector:


According to Venture Intelligence, a service provider that tracks deals and financial transactions across industries, the auto component industry witnessed 13 M&A deals in calendar year 2017 and four in the first three months of 2018 (overseas and domestic).

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

Venture Intelligence - Mint Deal Tracker (Apr 2, 2018)

Venture Intelligence is powering the Deal Tracker on The Mint - tracking Private Equity, Venture Capital, M&A, Real Estate and Strategic investments in India. The Deal Tracker is featured in the Deals Section (Page 3) every Monday.


For comprehensive coverage on upcoming PE/VC, M&A, Angel and Strategic Investments sign-up to our Daily/Weekly Newsletter. View a sample Deal Digest Newsletter here.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

April 05, 2018

The Business Of Hospitals: Big-ticket deals dominate PE/VC investment flows: The Indian Express

An Indian Express article quotes Venture Intelligence data on Private Equity investments in Hospitals:


Data sourced from Chennai-based research firm Venture Intelligence shows that a total $3.4 billion has been injected into hospitals by PE investors from 2007 till 2017. Notably, almost half of the investment during the period came via 10 transactions. Prior to the Fortis deal, the largest one was in early 2016, when Dubai-headquartered Abraaj Group bought controlling stake in Hyderabad-based CARE Hospitals for around $221 million.
In two deals in 2015 and 2017, Manipal Health raised $321 million from TPG Capital and Temasek Holdings, respectively. Naresh Trehan-led Medanta Medicity, in two deals in 2013 and 2015, received $275 million from Carlyle Group and Temasek, respectively.


Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

April 02, 2018

VCs favour B2B startups over B2C in Q1 2018

Overall VC investments dip 30%

B2B Companies grabbed 60% of the VC funding in the first quarter of calendar year 2018 - 46 deals (worth $148 million) compared to consumer companies which grabbed 30 deals (worth $109 million). Top VC investments in B2B Companies included those in SaaS startups like Chargebee, SirionLabs and payroll and benefits management company NiYO. Just the Enterprise Software segment accounted for 28% of total VC investments (by volume).


Overall Venture Capital firms made 76 investments (worth $257 million)in Q1’18- 30% lower compared to 109 deals (worth $397 million) recorded in the same period in 2017, data from Venture Intelligence shows. (Note: Venture Capital is defined by Venture Intelligence as Seed to Series D round investments in companies less than 10 years old with value of up to $20 Million.)

Angel investments (by angel networks and super angels) slipped Quarter-on-Quarter to 48 deals in Q1’18 compared to the 51 investments in Q4’17.

Top Deals


Vernacular social network ShareChat raised $18 million from SAIF, Lightspeed Ventures, strategic investor Xiaomi and others. Subscription billing Saas company Chargebee raised a similar amount from US-based Insight Venture Partners and existing investors Accel India and Tiger Global. Women’s wear company Go Colors raised $15.7 million from ICICI Ventures.

Company
Sector
Investors
Amount($M)
ShareChat
Social Network
Xiaomi, SAIF Partners,
Lightspeed Ventures, Others
18.2
ChargeBee
Subscription Billing
Insight Venture Partners, Tiger Global, Accel India
18
Go Colors
Womeswear
ICICI Venture
15.7
Coverfox
Marketplace -  Insurance
IFC, Others
14.7
NiYO
Employee Benefits
Social+Capital, Horizons Ventures, Prime Venture Partners, Others
13.2

By Sector


Tech investments accounted for 92% of the VC investments in the quarter - 70 deals worth $226 million. Among the top sectors, Healthtech registered 12 deals, followed by Fintech, Hardware and Edtech companies which registered 8 deals each.


VC Investments fell across major cities save Chennai. NCR companies registered a 46% fall in VC investments compared to Q1’17.


Venture Capital Exits


Venture Capital investors made 14 exits worth $292 million in Q1’18 - the lowest since Q1’17. 

The largest exit during the period was a $104 million part exit by Tiger Global and other investors from music platform Saavn, which was acquired by Reliance Jio Music. The second largest exit was a $61 million part exit by TPG Growth and IDG Ventures India from eyewear e-tailer Lenskart (through a secondary sale to TR Capital). 

Other VC exits in the quarter include a partial exit by IDG Ventures, SAIF and others from Xpressbees Logistics through a strategic sale to Alibaba. Tano Capital and Aavishkaar offloaded part of their stake in Arohan Financial Services (through a secondary sale to TR Capital).

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.