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Proposed IPO of Gold Plus Glass Industry Limited

JSA is advising IIFL Securities Limited, Axis Capital Limited, Kotak Mahindra Capital Company Limited and SBI Capital Markets Limited in relation to the proposed initial public offering of equity shares of Gold Plus Glass Industry Limited (“IPO”) comprising a fresh issue of up to ₹5000.00 million and an offer for sale aggregating up to 15,667,977 Equity Shares by two of the promoters (Mr. Suresh Tyagi and Mr. Jimmy Tyagi), PI Opportunities Fund – I and Kotak Special Situations Fund. Gold Plus Glass Industry Limited (the Company”) has filed its draft red herring prospectus with SEBI on February 9, 2024.

The Company is the second-largest float glass manufacturer in India with 22% share of manufacturing capacity for float glass as of September 30, 2023. (Source: CRISIL Report*) The Company is amongst the only two manufacturers in India with fungible production lines capable of manufacturing a comprehensive range of clear and value-added glass from a single manufacturing facility (Source: CRISIL Report*) which provides the Company with certain competitive advantages.

* Titled “Market assessment of glass industry in India” dated January 2024, prepared and issued by CRISIL MI&A.

Our Transaction Team comprised Lead Partner – Arka Mookerjee, Partner – Siddhartha Desai, Associate – Reshmi Prabhakar, Anvita Sinha and Ayushi Pandit.

Tags Banking and Financial Services, Capital Markets, IPO, J Sagar Associates, JSA, JSA Law Firm, Leading Law Firm, Leading Lawyers, SEBI

JSA Prism | Securities Law | February 2024

Please click here to download the Prism as PDF.

Guidelines for returning of draft offer document and its resubmission

On February 6, 2024, Securities and Exchange Board of India (“SEBI”) issued ‘Guidelines for returning of draft offer document and its resubmission’[1] (“Guidelines”). SEBI had observed that some draft offer documents filed with the Board for public issue/ rights issue of securities lack in compliance with instructions provided under Schedule VI of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR regulations”) which require revisions/changes, thus leading to longer processing time. To ensure the completeness of the offer document for investors and provide greater clarity and consistency in the disclosures and for the timely processing, SEBI decided to issue the Guidelines. The Guidelines emphasize that adequate disclosures by the issuer and the timely processing of the offer documents are important for the spirit of the primary market. The draft offer document should be scrutinized basis the broad Guidelines and any documents not in compliance with the instructions provided under Schedule VI of the ICDR Regulations and the Guidelines, will be returned to the issuer.

The broad parameters set out in the Guidelines are as follows:

The draft offer document should be drafted in simple language with clear visual representation of data ensuring short, definitive and unambiguous statements, use of conventional words, active voice, tabular presentation or bullets and avoiding multiple negatives;
The draft offer document is presented in a clear, concise, and intelligible manner while ensuring with clear and concise sections, paragraphs and sentences, descriptive headings and subheadings. Legal and technical terminology and clarifications of technical should be avoided and technical terms, if used, are clarified if needed to explain the issuer’s business or other matters in simpler terms;
The issuer of the draft offer document must avoid complex presentations, vague, ambiguous or imprecise explanations, complex information quoted or copied from legal documents unless accompanied with clear and concise explanation, repetition of disclosures in different sections of the documents unless required otherwise and any inconsistency in numbers, data, facts in the draft offer document;
The risk factor should be worded in simple, clear and ambiguous language to clearly communicate the risk to the investor;
The draft offer document would necessitate substantial revision or addenda on key disclosures on account of regulatory interpretation or clarification sought on the draft offer document;
The draft offer document should be clearly understandable without relying on the general rules and conditions;
No regulatory authority or enforcement agencies should express material concerns with regard to the issue or the draft offer document;
If any pending litigation matters in any court or tribunal impact the eligibility criteria provided under the ICDR Regulations for the issue/ draft offer document filed by the issuer, then such information must be mentioned in the draft offer document.

The Guidelines further state that there is no requirement for the payment of any fees on account of the draft offer document and the requirement for paying the applicable fees for the changes, in terms of the changes specified in Schedule XVI of the ICDR Regulations for the updated offer document. However, in case of non-submission of the draft offer document, there will be no refund of the filing fees.

The issuer and the lead manager must resubmit the offer document only after addressing the insufficiency in the draft offer document and ensuring it complies with the provisions of the ICDR Regulations. Upon resubmission, the Issuer must within 2 (two) days make a public announcement as specified in the ICDR Regulations and disclose the resubmission. The issuer will also make a written intimation to its sectoral regulators informing them of the return resubmission of the draft offer document.

SEBI vide the issuance of these Guidelines have brought about stricter checks and balances emphasising the need for compliance with disclosure requirements under Schedule VI of the ICDR Regulations and have laid down a streamlined process for the rejection and resubmission of the draft offer document.

This Prism has been prepared by:

Madhurima
Mukherjee Saha
Partner

Tanvi
Ginodia
Associate

For more details, please contact [email protected]

[1] Circular number SEBI/HO/CFD/PoD-1/P/CIR/2024/009.

Tags Capital Market, JSA, JSA Prism, Leading Law Firm, Leading Lawyers, Legal Updates, SEBI, Securities Law

Round Tripping: Permissible Overseas Investment Structures Under the New Regime

The New Odi Framework Is a Step in The Right Direction as It Provides Much Needed Clarity On the Kind of Structures That Are Permissible from an Overseas Investment Standpoint

Let us start with the basics. What does the term ‘round-tripping’ mean from a regulatory standpoint? The Indian regulatory regime does not offer a definition. The glossary of the 4th Edition of the OECD Benchmark Definition of Foreign Direct Investment defines it as “channelling abroad by direct investors of local funds and the subsequent return of these funds to the local economy in the form of direct investment

Please click here to read the full article by Ajay G Prasad, Soham Roy and Sneha Mohanty, published in Legal Era.

Tags Direct Investment, Investment, JSA, Leading Law Firm, Leading Lawyers, Regulatory

Finance | Annual Compendium 2023

This compendium consolidates all the relevant notifications and circulars pertaining to Finance, which has been circulated during the calendar period from January 2023 till December 2023.

To read further details, click here or refer to the below document.

For more details, please contact [email protected]

*In case the document is not visible on the device you are using, please click the link above.

Tags AIFs, Banking and Finance, Finance, Information Technology, JSA, Leading Law Firm, Leading Lawyers, Legal Updates, NBFCs, Newsletters, RBI, SEBI

IPO of EPACK Durables Limited

JSA advised India Advantage Fund S4 I (acting through its investment manager ICICI Venture Funds Management Company Limited) and Dynamic India Fund S4 US I in relation to the offer for sale of 5,261,686 equity shares aggregating to ₹ 1,210.19 million in the initial public offering of equity shares by EPACK Durables Limited (“IPO“) comprising of a fresh issue aggregating to ₹ 4,000.00 million and an offer for sale by existing shareholders aggregating to ₹ 2,400.53 million, at a price of ₹ 230 per equity share, aggregating to a total IPO size of ₹ 6,400.53 million.

EPACK Durables Limited successfully listed on January 30, 2024.

The book running lead managers to the IPO were Axis Capital Limited, DAM Capital Advisors Limited and ICICI Securities Limited.

EPACK Durable Limited manufactures room air conditioners (“RAC”) and small domestic appliances (“SDA”), and its components.

Deal value: ₹ 6,400.53 million

Our Transaction Team Comprised Lead Partner – Arka Mookerjee, Partner – Pracheta Bhattacharya, Associate – Shambhavi Kumar.

Tags Banking and Financial Services, Capital Markets, IPO, JSA, Leading Law Firm, Leading Lawyers, SEBI

Interim Union Budget, 2024

Please click here to download the Prism as PDF.

Introduction

Hon’ble Finance Minister tabled the Interim Budget for the fiscal year starting April 1, 2024 (“Budget”), ahead of the upcoming general elections. The Budget focusses on youth and women empowerment while reaffirming the commitment towards fiscal consolidation and increased capital expenditure. The fiscal deficit target for Financial Year 2024-25 is lowered to 5.1% of the GDP, as against the target set last year at 5.9% which is in sync with the commitment to achieve fiscal deficit of less than 4.5% by Financial Year 2025-26.

The budget hailed the achievements of the Government in the last 10 (ten) years, especially for delivering high growth and maintaining exemplary track record of governance, development, and performance and providing transparent, accountable, and people-centric, trust-based administration, with citizen-first, minimum-government and maximum-governance mode.

Since this is an interim budget, keeping in with the convention, no changes are proposed in direct and indirect tax rates, including import duties. However, certain amendments are proposed to ensure continuation of tax benefits to start-ups, sovereign wealth funds, pension funds and International Financial Services Centre (“IFSC”) units, which were expiring on March 31, 2024.

In the above backdrop, please find below a snapshot of the key tax proposals contained in the Budget.

DIRECT TAX

Personal Taxation

No changes are proposed to the income tax rates applicable. Accordingly, income tax rates as applicable to the previous financial year would continue to apply.

Taxation of Start-Ups

A tax holiday benefit is currently available to eligible start-ups which are incorporated before April 1, 2024. The sunset clause is proposed to be extended and the benefits would be available to eligible start-ups which will be incorporated before April 1, 2025.

Taxation of Financial Services

A tax exemption is currently available to certain incomes derived by the investment divisions of offshore banking units located at the IFSC. Currently, this beneficial provision is applicable to units which commence operations before April 1, 2024. This is now proposed to be extended to units which commence operations before April 1, 2025.
An exemption is available to non-residents in respect of income in the nature of royalty or interest on account of leasing of aircraft / ships which is paid by a unit in an IFSC to a non-resident. Additionally, tax deduction is provided in respect of income earned by units in an IFSC from transfer of aircraft or ship. The timeline to commence operations to be able to avail such benefits is proposed to be extended from March 31, 2024 to March 31, 2025.
Tax exemptions are available to specified entities such as Abu Dhabi Investment Authority, sovereign wealth funds or foreign pension funds on investments made by them up to March 31, 2024. This sunset clause date is proposed to be extended from March 31, 2024 to March 31, 2025.

Significant Procedural Changes

Certain changes were announced by way of circulars issued during the current financial year to the provisions relating to tax collection at source (“TCS”) on certain specified remittances such as under the Liberalised Remittance Schemes (“LRS”) (including overseas tour packages). The Finance Bill 2024 (“Finance Bill”) has proposed to introduce these changes into the provisions under Section 206C. These include exemption of TCS on remittance up to INR 7,00,000 (Indian Rupees seven lakh), lower TCS of 5% on remittances for education of medical purposes, LRS of 20% on other LRS remittances (including overseas tour packages) above INR 7,00,000 (Indian Rupees seven lakh).
The timeframe for the Central Government to issue directions relating to procedural aspects regarding the dispute resolution panel and the Income Tax Appellate Tribunal is proposed to be extended from March 31, 2024 to March 31, 2025.
In the Budget speech, the Finance Minister has also proposed to withdraw outstanding direct tax demands of up to INR 25,000 (Indian Rupees twenty-five thousand) pertaining to the period up to financial year 2009-10 and demands up to INR 10,000 (Indian Rupees ten thousand) for financial years 2010-11 to 2014-15.

INDIRECT TAX PROPOSALS

Goods and Services Tax

Following changes are proposed in the Central Goods and Services Tax Act, 2017 (“CGST Act”) which will come into effect upon the enactment of the Finance Bill.

Input Service Distributor (“ISD”) related provisions

In line with GST council’s recommendation in 50^th and 52^nd meeting, registration as an ISD is proposed to be made mandatory for the office of the supplier of goods or services, where the tax invoices for common input services are received.
Definition of ISD under Section 2(61) of the CGST Act is proposed to be amended to specifically include invoices for services liable to tax under reverse charge.
The present conditions for distribution of credit prescribed under Section 20 of CGST Act (i.e. pro-rata on the basis of turnover in a State) has been removed. The restrictions and conditions in this regard will be prescribed separately.

Penalty prescribed for non-adherence of special procedure for registration of machines by businesses operating in the tobacco sector

The Central Board of Indirect Taxes and Customs vide Notification No. 4/2014-Central Tax dated January 5, 2024 notified special procedure to be followed by businesses engaged in manufacture of pan masala, gutkha, tobacco etc. Details of packing machines used for filling and packing of packages are required to be electronically furnished in specified form, along with submission of monthly statement certified by a chartered engineer.
The said notification will come into effect from April 1, 2024.
The Finance Bill proposes to introduce new Section 122A to prescribe penalty of INR 1,00,000 (Indian Rupees one lakh), seizure and confiscation of unregistered machinery, in case of contravention of said special procedure notified vide Notification No. 4/2014-Central Tax dated January 5, 2024.

This Prism has been prepared by:

Kumarmanglam Vijay
Partner & Head of
Practice – Direct Tax

Manish Mishra
Partner & Head of Practice – Indirect Tax

Shareen Gupta
Partner

Surajkumar Shetty
Of Counsel

Ankur Mittal
Of-Counsel

Shikha Parmar
Principal Associate

Divyam Mittal
Senior Associate

Joybrata Misra
Senior Associate

For more details, please contact [email protected]

Tags 2024, Direct Tax, Interim Union Budget, JSA, Leading Law Firm, Leading Lawyers, Legal Updates

British International Investment provides financing of INR 1.2 billion to Sitara

JSA advised British International Investmentplc., the United Kingdom’s development finance institution and impact investor, in relation to a financing by way non-convertible debentures up to INR 1.2 billion issued by Sewa Grih Rin Limited (Sitara), an affordable housing finance company.

The primary goal of this debt financing is to enable Sitara to provide home loans to women from the informal sector in order to promote financial inclusion and women’s economic empowerment.

Our Transaction Team Comprised Partners – Aashit Shah, Tirthankar Datta, Principal Associate – Nakul Sonejee and Associate – Adrika Bisen.

Tags Banking and Financial Services, JSA, Leading Law Firm, Leading Lawyers, Womens Economic Empowerment

Qualified Institutions Placement by AXISCADES Technologies Limited

JSA advised IIFL Securities Limited, Ambit Private Limited and Centrum Capital Limited in relation to the qualified institutions placement by AXISCADES Technologies Limited (“AXISCADES”). AXISCADES filed a placement document on January 15, 2024 for an issue of 3,323,262 equity shares to qualified institutional buyers aggregating to approximately ₹ 2,200.00 million.

AXISCADES is one of the leading, end-to-end engineering and technology solutions company with expertise that caters to the digital, engineering and smart manufacturing needs of large global enterprises with over three decades of operations.

Deal value: INR 2,200 million

Our Transaction Team Comprised Lead Partner – Arka Mookerjee, Partner – Pracheta Bhattacharya, Principal Associate – Anshu Bansal, Senior Associate – Sourav Modi, Associate – Akash Joshi, Pooja Tada, Ayushi Pandit, and Anvita Sinha.

Tags Banking and Financial Services, Capital Markets, JSA, Leading Law Firm, Leading Lawyers

Qualified Institutions Placement of DCX Systems Limited

JSA advised DAM Capital Advisors Limited (the “BRLM“) in the qualified institutions placement of equity shares of DCX Systems Limited (“QIP”).

DCX Systems Limited (“Company”) is among the leading Indian manufacturing players for the manufacture of electronic sub-systems and cable harnesses in terms of manufacturing capability and revenue in Fiscal 2023 (Source: Company Commissioned F&S Report). The Company has issued 14,662,756 equity shares to qualified institutional buyers on January 19, 2024 aggregating to ₹5,000.00 million.

Deal value: USD 77.48 million

Our Transaction Team Comprised Lead Partner – Madhurima Mukherjee Saha, Partner – Mathew Thomas, Senior Associate – Sagar Batra, Associate – Richa Prasad, Sanat Goel, Rishika Kharbanda and Varun Nair.

Tags Banking and Financial Services, Capital Markets, JSA, Leading Law Firm, Leading Lawyers, Manufacturing, QIP

Qualified institutions placement by Shyam Metalics and Energy Limited

JSA advised Shyam Metalics and Energy Limited in relation to its qualified institutions placement for an issue of 24,051,165 equity shares to qualified institutional buyers aggregating to ₹ 13,853.40 million (“QIP”). ICICI Securities Limited were the placement agents to the QIP. Shyam Metalics and Energy Limited filed the placement document on January 5, 2024.

Shyam Metalics and Energy Limited is a leading integrated steel and ferro alloys producer, in terms of long steel products, in the eastern region of India and amongst the largest producers of ferro alloys, aluminium foils and pellets in India.

Deal value: ₹ 13,853.40 million

Our Transaction Team Comprised Lead Partner – Arka Mookerjee, Partner – Pracheta Bhattacharya, Principal Associate – Anshu Bansal, Senior Associate – Sourav Modi, Associate – Shambhavi Kumar and Reshmi Prabhakar.