JSA
In a candid conversation with Livemint, Arka Mookerjee, Partner, JSA Advocates and Solicitors, offered a comprehensive outlook of this bullish market and shared his insights on IPO valuations, the key role played by SEBI as a regulator and the potential impact of Artificial Intelligence (AI) on IPOs.
Please click here to read the full interview with Arka Mookerjee by Mint.
Please click here to download the document as PDF.
SEBI, vide notification dated September 2, 2025, has issued the SEBI (Delisting of Equity Shares) (Amendment) Regulations, 2025, amending the SEBI (Delisting of Equity Shares) Regulations, 2021. Special provisions dealing with delisting of public sector undertakings have been introduced. Some of the key provisions are as follows:
SEBI, vide notification dated September 2, 2025, has issued the SEBI (Infrastructure Investment Trusts (“InvITs”)) (Third Amendment) Regulations, 2025, amending the SEBI (InvITs) Regulations, 2014 (“InvIT Regulations”). Some of key amendments are as follows:
These amendments should help improve accessibility of InvITs as an investment option for more categories of investors;
SEBI, vide notification dated September 2, 2025, has issued the SEBI (Real Estate Investment Trusts (“REITs”)) (Second Amendment) Regulations, 2025, amending the SEBI (REIT) Regulations, 2014 (“REIT Regulations”). Some of the key amendments are as follows:
SEBI, vide notification dated September 2, 2025, has issued the SEBI (Portfolio Managers) (Amendment) Regulations, 2025 amending the SEBI (Portfolio Managers) Regulations, 2020 (“PM Regulations”). Pursuant to the amendment, the form of the disclosure document (included as Schedule V of the PM Regulations), i.e., the disclosure document to be provided by the portfolio manager to the client prior to entering into an agreement, has been deleted. Instead, the amended PM Regulations specify that the disclosure document must be in the form specified by SEBI.
Subsequently, on September 9, 2025, as part of an initiative for ease of doing business, SEBI has issued a simplified format of the disclosure document (accessible here) for portfolio managers. The disclosure document is divided into 2 (two) sections viz. static and dynamic. While the static section inter alia includes disclaimers, risk factors, taxation and diversification policy, the dynamic section inter alia includes:
SEBI, vide circular dated September 5, 2025, has streamlined the process for Know Your Client (“KYC”) Registration Agencies (“KRAs”) to surrender their registration, for voluntary/involuntary scenarios, so that their critical operations and services are wound down in an orderly manner. By way of context, the applicable regulations provide that a KRA’s registration surrender request would inter alia be assessed on factors concerning arrangement for preservation of records, transfer of client records, arrangements for continuity of services, investor grievance redressal mechanism etc.
It is proposed now that a KRA intending to surrender its registration certificate must transfer KYC records available with it to another SEBI registered KRA. Further, KRAs must formulate a board approved Standard Operating Procedure (“SOP”) to be followed in case of surrender of registration and must inter alia constitute an oversight committee for monitoring the winding down process, including transfer of KYC data, seamless investor services, as specified under the SOP.
KRAs must available the SOP available on their websites within 90 (ninety) days from September 5, 2025. The SOP must be reviewed periodically as and when circumstances warrant/necessitates or at least once in 5 (five) years. The circular provides a model SOP, detailing the process of selection of transferee KRA and respective procedures to be followed in scenario of voluntary and involuntary surrender of registration/winding down. Further, the circular also specifies that the SOP must be uniform and mutually agreed amongst the KRAs.
SEBI, vide notification dated September 8, 2025, has issued the SEBI (Share Based Employee Benefits and Sweat Equity) (Amendment) Regulations, 2025, amending the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (“Incentive Regulations”). Regulation 9A has been inserted which stipulates that an employee identified as a ‘promoter’ or part of the ‘promoter group’ in the draft offer document filed by a company with SEBI in relation to an initial public offering, who was granted options, Stock Appreciation Right (“SAR”) or any other benefit under any scheme at least 1 (one) year prior to filing of the draft offer document, would be eligible to continue to hold and/or exercise such options, SAR or any other benefit, as per its terms and subject to compliance with the Incentive Regulations and other applicable laws.
SEBI, vide notification dated September 8, 2025, has issued the SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2025, amending the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”). Some of the key amendments are as follows:
SEBI, vide notification dated September 8, 2025, has notified the SEBI (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2025 (“Amendment Regulations”). The Amendment Regulations introduce substantive changes to the disclosure framework for Qualified Institutions Placements (“QIPs”) under Schedule VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The amendments are aimed at simplifying and streamlining the information included in placement documents for QIP. The objective of these amendments is to eliminate the repetitive content and align the QIP disclosures with information already available through periodic filings under the LODR Regulations. The revised approach marks a pivotal shift towards concise, issue-specific disclosures, recognising that qualified institutional buyers are sophisticated investors with access to extensive public information on listed issuers.
For a detailed analysis, please refer to the JSA Prism of September 13, 2025.
SEBI, vide circulars dated September 9, 2025 and September 10, 2025, has amended the SEBI (Alternative Investment Funds (“AIF”)) Regulations, 2012, increase operational clarity, investor protection and ease of doing business. These changes include new rules for Co-investment Schemes (“CIV Schemes”), stricter investor criteria and enhanced compliance requirements for fund managers and sponsors. Some of the key amendments are as follows:
Co-investment through a CIV Scheme will be carried out by manager of Category I AIFs or Category II AIFs, subject to certain key operational modalities as specified below:
To facilitate ease of regulatory compliances for Foreign Portfolio Investors (“FPIs”) investing only in Government Securities (“G-Secs”), (“GS-FPIs”), SEBI, vide circular dated September 10, 2025, has amended the Master Circular for FPIs, Designated Depository Participants and Eligible Foreign Investors dated May 30, 2024, as follows:
FPIs that invest exclusively in G-Secs under fully accessible route will not be required to furnish investor group details;
The provisions of this circular will come into force with effect from February 8, 2026.
SEBI, vide notification dated September 18, 2025, has notified the SEBI (Custodian) (Amendment) Regulations, 2025. These amendments, which will take effect after 6 (six) months i.e. from March 17, 2026, aim to make custodians of securities financially stronger, more accountable and compliant with higher governance standards. Some of the key amendments are as follows:
SEBI, vide circular dated September 19, 2025, has modified the framework on SSE dated September 19, 2022. Some of the key modifications are as follows:
In order to streamline the process of transmission of securities from nominee to legal heir and resolve issues related to taxation, SEBI vide circular dated September 19, 2025, has mandated that a standard reason code viz. ‘Transmission to Legal Heirs’ must be used by the reporting entities while reporting the transmission of securities from nominee to legal heir, to the Central Board of Direct Taxes, so as to enable proper application of the provisions of the Income Tax Act, 1961.
RBI has issued the new Master Directions on the Regulation of Payment Aggregators (“PAs”), effective September 15, 2025 (“New PA Directions”). It aims to standardise the regulatory framework and provide greater clarity to the payments sector. Key updates include explicit coverage of offline PAs, clarification of the RBI’s position on third‑party payouts and standardised merchant KYC practices for PAs. While the New PA Directions formalise many practices and offers welcome clarity, certain areas, most notably the classification of hybrid physical/online transactions and the wording around simplified KYC, may still require further clarification.
For a detailed analysis, please refer to the JSA Prism of September 18, 2025.
RBI, vide circular dated September 25, 2025, has issued the RBI (Authentication Mechanisms for Digital Payment Transactions) Directions, 2025. These directions are applicable to all payment system providers and payment system participants (banks and non-banks) and to all domestic digital payment transactions, unless specifically exempted. These will be effective April 1, 2026, mandating two-factor authentication for all transactions. Issuers must implement mechanisms for handling cross-border Card Not Present transactions by October 1, 2026, and register their bank identification numbers with card networks.
RBI, vide circular dated September 26, 2025, has issued the RBI (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025. The directions provide a harmonised framework to standardise the documentation for settlement of claims in respect of deposit accounts, safe deposit locker and articles in safe custody of a deceased customer and to minimise the difficulties faced by the nominees, survivors and legal heirs. The revised norms mandate banks to settle claims on deceased customers’ accounts and lockers within 15 (fifteen) days, with compensation for delays. Further, the procedure for accounts below INR 15,00,000 (Indian Rupees fifteen lakh) (INR 5,00,000 (Indian Rupees five lakh) for co-operative banks) is simplified, while higher amounts may require additional documents. The instructions issued vide these directions must be implemented as expeditiously as possible but not later than March 31, 2026.
On September 4, 2025, the MCA amended the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, in alignment with the recommendations of the Company Law Committee’s Report, 2022 and the Union Budget 2025–26. The amendment has primarily broadened the Fast-Track Merger (“FTM”) framework, by extending the classes of companies eligible for FTM. The amendment further simplifies compliance procedures and consolidates regulatory requirements, reflecting the government’s push towards mitigating procedural complexities, reducing the burden on the tribunals and decluttering judicial bandwidth.
For a detailed analysis, please refer to the JSA Prism of September 19, 2025.
In a recent judgment, the Hon’ble Supreme Court of India (“Supreme Court”), ruled that non-signatories to an arbitration agreement cannot be permitted to participate in arbitral proceedings. This would undermine the confidentiality safeguard under Section 42A of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). The Supreme Court also emphasised that once an arbitrator is appointed under Section 11(6) of the Arbitration Act, the referring court becomes functus officio. The court cannot issue any further ancillary directions, since the Arbitration Act is a self-contained framework and under Section 5, it expressly limits judicial intervention.
For a detailed analysis, please refer to the JSA Prism of September 16, 2025.
On August 25, 2025, the Supreme Court held that mere non-signing of the arbitration agreement would not invalidate the arbitration agreement if the parties’ conduct demonstrated acceptance and performance in accordance with the contract. The judgment upholds the principle of party autonomy in its true sense, disallowing parties to bypass a consensual arbitration agreement on a mere technicality. The terms of the commercial agreement have been given effect through the conduct of the parties, rather than being invalidated on account of its mere non-signing. The judgment also reiterates the principle of limited scrutiny permitted under Section 45 of the Arbitration Act.
For a detailed analysis, please refer to the JSA Prism of September 17, 2025.
The Supreme Court has re-affirmed that the scope of Section 11 of the Arbitration Act is confined to a prima facie determination of the existence of an arbitration agreement and appointment of arbitral tribunal. The issue of arbitrability of individual claims cannot be assessed at such stage. The judgment emphasised that the arbitral tribunal has the jurisdiction to determine whether any claim falls within ‘excepted matter’ or is otherwise non-arbitrable. The Supreme Court thus held that bifurcating claims into arbitrable and non-arbitrable in an application under Section 11 of the Arbitration Act is in excess of judicial authority and results in unwarranted interference in arbitration proceedings.
For a detailed analysis, please refer to the JSA Prism of September 17, 2025.
On September 2, 2025, a Division Bench of the Supreme Court allowed an appeal arising from an order of the Allahabad High Court (“Allahabad HC”) whereby the Allahabad HC had dismissed the appellant’s petition to quash a summoning order dated August 25, 2015. The Supreme Court formulated a 4 (four) pronged test to guide High Courts in assessing the bona fides of such pleas while exercising their inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973, namely, whether: (a) material relied upon by the accused is sound and impeccable; (b) such material negates the complaint’s allegations; (c) the material is unrefuted or irrefutable; and (d) trial would be an abuse of process.
For a detailed analysis, please refer to the JSA Prism of September 23, 2025.
In a recent judgment dealing with the execution of a foreign arbitral award, the Hon’ble High Court of Delhi (“Delhi HC”) has reiterated that an executing court is barred from attaching property outside its territorial jurisdiction. It must follow the procedure prescribed under the Code of Civil Procedure, 1908 (“CPC”) and issue a precept to the competent court having territorial jurisdiction over the property for its attachment. This judgment underscores the strict territorial discipline embedded in the CPC for execution proceedings, even in the context of foreign awards. From a commercial perspective, the ruling is significant for foreign investors and award-holders, as it clarifies how arbitral awards can be effectively enforced in respect of assets spread across multiple jurisdictions in India. The decision is a reminder that enforcement strategy must be jurisdiction-sensitive, and procedural shortcuts run the risk of delays in execution and may jeopardize recovery.
For a detailed analysis, please refer to the JSA Prism of September 8, 2025.
On August 11, 2025, the Delhi HC allowed referral of disputes to arbitration qua non-signatories to arbitration agreement. The Delhi HC held that the question of whether the non-signatories are veritable parties to the arbitration agreement could not be conclusively determined at the preliminary stage of inquiry under Section 11(6) of the Arbitration Act. Such a determination must be left to the arbitrator to decide. While it may be argued that issues of fact are within the domain of the arbitrator, the judgment referring a party non-existent at the time of the arbitration agreement’s execution dilutes the principle of party autonomy. It signals a shift towards making the inclusion of non-signatories in arbitration less of an exception than originally intended. This holds especially true when it has been held that the basis for binding a non-signatory to an arbitration agreement is implied or tacit consent.
For a detailed analysis, please refer to the JSA Prism of September 11, 2025.
On August 4, 2025, the Delhi HC rejected a commercial suit due to non-adherence to the mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015 (“CC Act”). While analysing the legislature’s objective behind incorporation of Section 12A of the CC Act and the negative language used in the provision, the Delhi HC held that the intention to make the provision mandatory is clearly made out. In such a scenario, the plea for exemption from pre-institution mediation must be scrutinised by the courts on the facts of the case. Such exemption cannot be decided mechanically merely from the standpoint of the plaintiff.
The judgment is a welcome reiteration of the principles of statutory interpretation. It upholds the objective of the legislature to boost the Indian economy by providing a speedy framework for resolution of commercial disputes. By reaffirming the mandatory nature of the pre-institution mediation and the court’s role in assessing urgency, the Delhi HC has prevented parties from easily bypassing the requirements of Section 12A of the CC Act.
For a detailed analysis, please refer to the JSA Prism of September 12, 2025.
The Hon’ble Bombay High Court’s (“Bombay HC”) recent ruling affirms that stamp duty refunds cannot be withheld on hyper-technical grounds such as the absence of a formal deed of cancellation when the transaction itself has failed. The judgment highlights the Court’s commitment to upholding the rights of bona fide taxpayers by accepting affidavits and indemnity bonds as sufficient evidence in lieu of formal cancellation deeds. The ruling provides critical relief to businesses facing failed property transactions, emphasising fairness and preventing unjust enrichment of the State.
For a detailed analysis, please refer to the JSA Prism of September 17, 2025.
The Bombay HC, in a recent judgment, clarifies that in the absence of an exclusive jurisdiction clause, the provisions of statutory arbitration under the Micro, Small and Medium Enterprises (“MSMEs”) Development Act, 2006 will prevail in determining the jurisdiction of courts in arbitral proceedings. The ruling clarifies that petitions under Section 34 of the Arbitration Act must be filed before the principal courts of civil jurisdiction that would possess jurisdiction to deal with the dispute. This decision underscores the importance for parties to exercise diligence in drafting jurisdiction and dispute resolution clauses specifically while entering into contracts with MSMEs.
For a detailed analysis, please refer to the JSA Prism of September 29, 2025.
This Newsletter has been prepared by:
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Siddharth Mody |
Ronak Ajmera |
Rohan Kumar |
Udit Rao |
For more details, please contact [email protected]
Please click here to download the Prism as a PDF.
The Reserve Bank of India (“RBI”) has released draft amendments to the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 (“Draft ECB Amendment Regulations”). The Draft ECB Amendment Regulations propose to make deep structural reforms and overhaul and revamp External Commercial Borrowings (“ECB”) framework.
Some of the key changes proposed to the ECB framework under the Draft ECB Amendment Regulations are as follows:
Eligible borrowers
Current position
In the last round of liberalisation, the RBI had substantially expanded the criteria of eligible borrowers permitted to avail ECBs to include any entity eligible to receive Foreign Direct Investment (“FDI”).
Proposal
The RBI intends to further expand the list to include persons resident in India (other than an individual) incorporated, established or registered under the Central or State Act and subject to being permitted to borrow in term of applicable laws.
Implication
Entities which are incorporated in India (irrespective of the sector in which it operates and whether FDI is permitted in that entity) will be allowed to raise an ECB. This will now include limited liability partnerships who were earlier not permitted to borrow ECBs.
Recognised lenders
Current position
A lender (other than for certain specified categories) should be from a Financial Action Task Force (“FATF”) or International Organisation of Securities Commissions (“IOSCO”), compliant jurisdiction.
Proposal
The Draft ECB Amendment Regulations propose to remove the requirement that an ECB lender should be from a FATF or IOSCO compliant jurisdiction.
Any person resident outside India/branch outside India or in the International Financial Services Centre (“IFSC”) of an entity whose lending business is regulated by the RBI, can lend an ECB.
Implication
All foreign residents will be able to extend ECBs irrespective of their jurisdiction being FATF or IOSCO compliant. Further, offshore and IFSC branches of Indian banks will also be able to extend Indian Rupees (“INR”) ECBs.
Based on the Draft ECB Amendment Regulations, treasury centres of corporates (which are not regulated by RBI) may not be permitted to extend ECBs to their parent entity in India, which may need to be revisited at the time of finalisation of this regulation.
Borrowing limits
Current Position
Borrowers can raise ECB up to USD 750,000,000 (US Dollars seven hundred and fifty million) in a financial year under the automatic route. Borrowing entities are also required to comply with the debt equity ratio imposed by any sectoral or prudential regulator.
Proposal
The borrowing limit is now proposed to be enhanced to the higher of: (a) USD 1,000,000,000 (US Dollars one billion) will be permitted for all borrowers that are not regulated by financial sector regulators; or (b) total outstanding borrowing (both external and domestic) up to 300% of net worth as per the last audited balance sheet.
No limit will apply to borrowers that are regulated by financial sector regulators (RBI, Securities and Exchange Board of India etc.). However, they will need to comply with the limits imposed by such financial sector regulators.
Implication
Entities with a high networth will be able to borrow a higher amount of ECBs without prior approval of the RBI. Earlier such frequent borrowers who were breaching the earlier annual cap for ECBs were going under the RBI approval route. Further, non-banking financial companies and other entities regulated by financial service regulators will be able to borrow without a cap under the ECB guidelines. It should be clarified whether the term ‘outstanding borrowings’ would include undrawn sanction limits or only the amounts that are drawn will be calculated within this limit.
Ceiling on cost of borrowing
Current position
Currently an all-in-cost ceiling of 500 (five hundred) Basis Points (“bps”) over the benchmark for Foreign Currency (“FCY”) ECB and 450 (four hundred and fifty) bps spread over the benchmark applies for INR ECB. Additionally, prepayment charge and penal interest can be up to an additional 2%.
Proposal
The cost of borrowing is proposed to be in line with market conditions, subject to satisfaction of the Authorised Dealer Bank (“AD Banks”).
For ECBs with an average maturity period of less than 3 (three) years, the cost of borrowing is proposed to be additionally linked with cost ceiling specified for Trade Credits (“TCs”) (i.e. benchmark rate plus 300 (three hundred) bps for FCY TCs and benchmark rate plus 250 (two hundred and fifty) bps for INR TCs). In the case of fixed rate loans, the swap cost plus spread should not be more than the ceiling.
Additionally, the ceiling of 2% on penal or default interest and prepayment penalty is proposed to be linked with prevailing market conditions as well.
Implication
This may increase the volume of ECBs and result in high-yield ECBs.
However, providing AD Banks with the discretion to determine the prevailing market rate may cause uncertainty and lead to varying practice by various AD Banks. RBI should consider setting out an objective criterion to what will constitute ‘prevailing market rate’ which may be overseen by AD Banks.
Minimum average maturity
Current position
The minimum average maturity of an ECB was determined basis its end-use.
Proposal
The minimum average maturity is now proposed to be 3 (three) years, irrespective of the end-use, other than for borrowers in the manufacturing sector for an ECB upto USD 50,000,000 (US Dollars fifty million) which may be between 1 (one) to 3 (three) years.
Further, the minimum Average Maturity Period (“MAMP”) requirements will not need to be met if:
The restriction on foreign branches or subsidiaries of Indian banks lending for certain end-uses (such as general corporate, working capital and repayment of INR debt) also appears to have been removed.
Implication
This will help borrowers to avail themselves of ECBs for varied end uses. Long term capital of 7 and 10 year maturities was scarce in the ECB market and with the liberalised position, the borrowers will have access to capital for larger pool of end uses.
No MAMP requirement for repayment of ECBs through raising of foreign equity will help structuring financing transactions effectively. RBI should consider expressly clarifying non-applicability of MAMP in case of payment under a corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 and a payment event of default under the loan document to provide better clarity to the ECB lenders.
End-use
Current position
ECB cannot be used for a specified negative list of end-uses. This included investment in equity shares not being permitted. In the real estate sector, ECB cannot be used other than for development of industrial parks/integrated townships/ Special Economic Zone (“SEZ”) purchase / long term leasing of industrial land as part of new project / modernisation or expansion of existing units or any activity under ‘infrastructure subsectors’. Further, ECB cannot be used for acquisition financing.
Proposal
The proposed amendments are now liberalising the end use by permitting real estate activities permitted for FDI along with purchase/long term leasing of industrial land as part of a new project/modernisation or expansion of a existing units. Additionally, in a significant reform, transacting in listed or unlisted securities from the proceeds of an ECB is now proposed to be permitted.
Implication
Aligning ECB end use with the FDI regulations for real estate sector will allow for additional sources of funding. ECB will be permitted to be utilised towards development of townships, construction of residential/ commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional level infrastructure, townships, as well as in connection with leasing of properties. This will also permit foreign shareholders to provide ECBs to entities in real estate sector.
Further, ECB will also be permitted to be utilised for acquisition of shares of an Indian company. These are significant changes which may result in ECBs being one of the avenues for acquisition finance and real estate finance, which constitute a high share of the private credit deals in India. As on-lending can only be to an eligible borrower, it appears that NBFCs will not be able to use ECBs for providing loans to individuals borrowers.
Refinancing
Current position
ECBs can be refinanced subject to satisfaction of certain conditions. Indian banks are not permitted to refinance ECBs other than for highly rated borrowers or for Maharatna/Navratna public sector undertakings.
Proposal
Indian banks will be permitted to participate in refinancings for all borrowers.
Implication
This will provide level playing field to offshore branches of Indian banks in refinancing deals. RBI should also consider extending this to ECBs which were availed under the current regime and provide that the average maturity of the ECB being refinanced should be assumed to be 3 (three) years. This will help migrate long term ECBs from the existing regime to new regime.
A more detailed comparison is annexed hereto.
The proposed reforms mark a seismic shift in how Indian companies can avail of global debt capital. Borrowers will now be able to raise external debt for a wide range of purposes with a minimum maturity of 3 (three) years. The move opens the ECB market to a far larger pool of international lenders and investors, moving beyond the traditional reliance on banks and development finance institution. Unlike the Foreign Portfolio Investment route for INR bonds, overseas lenders under ECB don’t need Indian registration or any specific approval to participate.
Private credit stands to benefit from these changes and can now participate through the ECB route. It has been, and will continue to be a key source of financing for Indian borrowers, offering not only an additional pool of capital but also greater structuring flexibility and execution agility.
| Provisions | Extant ECB Framework | Draft ECB Amendment Regulations and Observations (if any) |
| Eligible Borrowers | Under the current regime, the following entities are allowed to raise ECBs:
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Under the proposed eligibility criteria, the following entities will be able to raise ECBs:
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| Recognised Lenders | An eligible borrower may raise ECBs only from:
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Under the proposed eligibility criteria, the following will be considered recognised lenders:
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| Arm’s length principle | There is no such requirement included in the extant ECB Framework. |
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| Currency and restriction on conversion |
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1. ECB can be raised in FCY or INR.
2.In addition to the previously permitted conversion, change in currency from INR to FCY has also been permitted. |
| Borrowing limit |
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1. An eligible borrower may raise ECB up to the higher of: (a) outstanding ECB up to USD 1 billion (United States Dollar one billion); or (b) total outstanding borrowing (external and domestic) up to 300% (three hundred percent) of net worth as per the last audited balance sheet.
2.Borrowers that are regulated by financial sector regulators (RBI, Securities and Exchange Board of India etc.), will be exempted from the abovementioned limits. |
| All-in-cost ceiling and other costs | 1. The prescribed all-in-cost ceiling per annum for: (a) FCY denominated ECB to be benchmark rate plus 500 bps spread; and (b) INR denominated ECB to be benchmark rate plus 450 bps spread.
2.Further, any prepayment charge/ penal interest for default or breach of covenants, is prescribed to be not more than 2% over and above the contracted rate of interest on the outstanding principal amount and will be outside the all-in-cost ceiling. |
1. The proposed amendments have substituted the construct of ‘all-in-cost’ with ‘cost of borrowing’.
2. There is no prescribed fixed limit, the cost of borrowing and prepayment charge/ penal interest (if any), is to be in line with prevailing market conditions and subject to the satisfaction of the designated AD Category I bank. 3. In case of ECBs with average maturity period of less than 3 years, the cost of borrowing will additionally have to be in compliance with the cost ceiling specified for TC. |
| End use |
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| On-lending | 1. On-lending to entities is not allowed in respect of negative list of activities which includes real estate activities, investment in capital market, equity investment, working capital purposes, general corporate purposes and repayment of rupee loans.
2. On-lending by NBFC for the purpose of working capital purposes, general corporate purposes and repayment of rupee loans, is allowed subject to prescribed MAMP. |
Under the proposed amendments, on-lending has been restricted except if by a person resident in India: (a) whose lending business is regulated by the RBI; and (b) that is a company or a body corporate established under a Central Act or State Act, lending to its group entity. |
| Minimum average maturity rate | Under the extant ECB Framework, MAMP for ECB is 3 years, however, depending on the category, the MAMP is prescribed to be 1, 5, 7 or 10 years. For e.g. MAMP of 1 year has been prescribed for ECB raised by manufacturing companies of an amount up to USD 50 million or its equivalent. |
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| Refinancing of ECBs |
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1.An eligible borrower may refinance an existing ECB, in part or full, by a fresh ECB, subject to the condition that refinancing doesn’t result in:
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| Hedging |
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Hedging requirements have been removed. |
| Security |
|
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| Monthly reporting of transactions | Borrowers are required to report ECB transactions though AD Category I bank on a monthly basis through Form ECB 2 Return. | The requirement of reporting monthly through Form ECB 2 Return has been relaxed and only if there is any cashflow then the borrower is required to report within 30 calendar days of such cashflow. |
This Prism has been prepared by:
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Tirthankar Datta |
Utsav Johri |
Aditi Singh Kashyap |
For more details, please contact [email protected].
Our Partner, Manvinder Singh, was recently invited to participate in CNBC-Awaaz’s programme, Crypto Corner. This exclusive segment explored the intricate landscape of cryptocurrencies in India and the evolving regulatory framework influencing their adoption.
Please click here to download the Prism as a PDF.
The Reserve Bank of India (“RBI”), on October 24, 2025, has published the draft RBI (Commercial Banks – Capital Market Exposure) Directions, 2025 (“CME Directions”), inviting comments and feedback. The CME Directions are applicable to all Commercial Banks (excluding Small Finance Banks, Regional Rural Banks, Local Area Banks, and Payment Banks) (the “Banks”). The CME Directions are proposed to come into force on (a) April 1, 2026; or (b) such other earlier date when the CME Directions are adopted by a Bank in entirety.
The CME Directions intend to consolidate the regulatory framework for governing capital market exposures (“CME”) by Banks. CME is classified as being either direct (“Investment Exposure”) or indirect (“Credit Exposure”):
Below is a summary of the key features of the CME Directions, with a particular focus on the provisions applicable to Bank financing of acquisitions, of both Indian and overseas companies, and the prudential framework prescribed by RBI in this context.
Acquisition finance:
‘Acquisition finance’ is defined to mean providing finance either:
for purchase of all or a controlling portion of another domestic or foreign company’s (the “target company”) shares or assets to gain control over the target company and its operations.
For the purposes of this definition, ‘control’ includes the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner.
Eligible borrowers:
Eligible target companies: The target company should:
Nature of acquisition: Post acquisition, the acquiring company should gain ‘control’ of the target. The acquisition should be driven by the core objective of long-term value creation and not mere financial restructuring for short term gains.
Security:
The residual maturity of the securities (in case of securities with fixed maturity) taken as collateral should be equal to or longer than the tenor of the loan.
Eligible Securities:
Prohibited lending:
The CME Directions explicitly prohibit Banks from extending loans:
Loans for general business purposes:
In addition to acquisition finance, Banks may also extend loans for general business purposes:
Lending by Banks for general business purposes will be subject to the following Loan to Value (“LTV”) ceilings:
| Eligible Security | LTV ceiling |
| Government securities including T-Bills | As per the Bank’s policy |
| SGBs | As applicable in case of loans against gold and silver collateral in accordance with RBI guidelines |
| Listed shares and listed convertible debt securities | 60% |
| Mutual Funds (excluding debt mutual funds), units of ETF (excluding commodity ETFs) and units of REITs/InvITs | 75% |
| Debt mutual funds | 85% |
| Listed debt securities | Rated AAA: 85%
Rated AAA- / BBB: 75% |
| Commercial papers | Rated A1: 85%
Rated A2-A3: 75% |
Banks should monitor the end use of funds in such cases and ensure that the funds are not used for speculative purposes.
Prudential requirements in relation to acquisition finance:
CME ceilings:
| Aggregate CME, on a solo basis | Should not exceed 40% of the Bank’s Tier 1 capital as on March 31 of the previous financial year |
| Aggregate CME, on a consolidated basis | Should not exceed 40% of the consolidated Tier 1 capital as on March 31 of the previous financial year |
| Aggregate of the Bank’s Investment Exposure and acquisition finance exposure | Should not exceed 20% of the solo and consolidated Tier 1 capital of the Bank, as applicable |
The aforesaid limits are required to be maintained by the Banks on an ongoing basis. Banks are permitted to have lower prudential ceilings under their respective board-approved policies. Prudential ceilings applicable to specific Credit Exposures have been set out under the CME Directions and should be complied with when undertaking such Credit Exposure.
Any breach of the prudential ceilings due to acquisition of equity shares by Banks pursuant to the process of restructuring of their loans and advances would not result in a breach of the CME Directions, subject to other statutory restrictions, necessary reporting to the RBI and disclosure in the financial statements of the Banks.
The proposed regulations are a timely and strategic move to strengthen mergers and acquisitions and capital market activity in India. While Indian banks have long been permitted to finance overseas acquisitions, domestic acquisition financing (except in the infrastructure sector) has historically been restricted. These changes mark a significant shift in enabling broader participation by banks in financing domestic acquisitions. A few observations are set out below:
This is a welcome regulatory move by RBI. It is essential that all stakeholders actively engage during this consultation period to share their concerns and suggestions, enabling the RBI to shape guidelines that are both effective and facilitative.
This Prism has been prepared by:
|
Soumitra Majumdar |
Shrijita Bhattacharya |
Harvi Shah |
Gavin Pais |
For more details, please contact [email protected].
JSA is advising J.P. Morgan, in its capacity as the manager to the open offer, in the open offer made by Emirates NBD Bank (P.J.S.C.) to the public shareholders of RBL Bank Limited (“Bank”). The Bank is listed on BSE and NSE.
The underlying transaction involves a preferential issue by the Bank for an amount not exceeding ~USD 3 billion with an open offer size of ~USD 1.3 billion.
The transaction was led by Partner, Anand Lakra with support from Principal Associate, Ami Shah, Associate, Janhavi Jagtap, and Associate, Viraja Shah.
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September 2025 witnessed a flurry of regulatory activity across India’s financial sector, with both, the Securities and Exchange Board of India (“SEBI”) and the Reserve Bank of India (“RBI”), introducing a series of amendments and frameworks aimed at deepening market transparency, easing compliance and strengthening investor protection. Further, the Supreme Court of India (“Supreme Court”) in the insolvency space, has provided greater clarity and certainty for creditors relying on financial disclosures to preserve their rights under the Insolvency and Bankruptcy Code, 2016 (“IBC”).
SEBI introduced notable amendments through the SEBI (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2025, which refine issuer obligations in initial public offerings, revise eligibility norms for social enterprises and streamline disclosures for Qualified Institutions Placements (“QIPs”). SEBI further notified the SEBI (Real Estate Investment Trusts (“REITs”)) (Second Amendment) Regulations, 2025 and the SEBI (Infrastructure Investment Trusts (“InvITs”)) (Third Amendment) Regulations, 2025, which clarify key definitions, refine valuation and disclosure requirements for quarterly and annual submissions. They also introduce enhanced reporting duties for sponsors, managers and investment managers.
The SEBI (Alternative Investment Funds (“AIF”)) (Second Amendment) Regulations, 2025 establish a structured framework for Co-investment Schemes (“CIV Schemes”) within the AIF ecosystem, expand governance requirements and comprehensively reform the angel fund regime. Complementary operational guidelines set out modalities for co-investments, while further amendments ease compliance requirements for Foreign Portfolio Investors (“FPIs”) investing solely in Government Securities (“G-Secs”).
RBI has likewise implemented a suite of prudential and operational reforms, including the RBI (Regulation of Payment Aggregators) Directions, 2025, which establish a unified framework for both bank and non-bank payment aggregators with clear rules, cross-border payouts, and the inclusion of offline aggregators. RBI has also mandated two-factor authentication for all domestic digital payment transactions via the RBI (Authentication Mechanisms for Digital Payment Transactions) Directions, 2025. To augment prudential standards, the eligible limit for Perpetual Debt Instruments in AT-1 capital has been revised. The Foreign Exchange Management (Debt Instruments) (Fourth Amendment) Regulations, 2025 expand investment options for non-residents with rupee accounts, now covering a wider array of corporate and government debt securities in line with RBI terms and conditions.
SEBI, vide notification dated September 2, 2025, has issued the SEBI (InvITs) (Third Amendment) Regulations, 2025, amending the SEBI (InvITs) Regulations, 2014 (“InvIT Regulations”). Some of key amendments are as follows:
SEBI, vide notification dated September 2, 2025, has issued the SEBI (REITs) (Second Amendment) Regulations, 2025, amending the SEBI (REIT) Regulations, 2014 (“REIT Regulations”). Some of the key amendments are as follows:
SEBI, vide circular dated September 5, 2025, has streamlined the process for Know Your Customer (“KYC”) Registration Agencies (“KRAs”) to surrender their registration, for voluntary/involuntary scenarios, so that their critical operations and services are wound down in an orderly manner. A KRA must make the Standard Operating Procedure (“SOP”) for winding down available on their websites within 90 (ninety) days from September 5, 2025. The SOP must be reviewed periodically as and when circumstances warrant/necessitates or at least once in 5 (five) years. A KRA surrendering its certificate of registration must constitute an oversight committee which will be responsible for monitoring the winding down process, including transfer of KYC data, seamless investor services, as specified under the SOP. The circular provides a model SOP, detailing the process of selection of transferee KRA, procedure to be followed in scenario of voluntary surrender of registration/winding down and procedure to be followed in scenario of involuntary surrender of registration/winding down.
SEBI, vide circulars dated September 9, 2025 and September 10, 2025, has amended the SEBI (AIFs) Regulations, 2012, increase operational clarity, investor protection and ease of doing business. These changes include new rules for CIV Schemes, stricter investor criteria and enhanced compliance requirements for fund managers and sponsors. Some of the key amendments are as follows:
To facilitate ease of regulatory compliances for FPIs investing only in G-Secs (“GS-FPIs”), SEBI, vide circular dated September 10, 2025, has amended the Master Circular for FPIs, Designated Depository Participants and Eligible Foreign Investors dated May 30, 2024 as follows:
The provisions of this circular will come into force with effect from February 8, 2026.
SEBI, vide notification dated September 18, 2025, has notified the SEBI (Custodian) (Amendment) Regulations, 2025. These amendments, which will take effect after six months i.e. from March 17, 2026, aim to make custodians of securities financially stronger, more accountable and compliant with higher governance standards. Some of the key amendments are as follows:
RBI, vide circular dated September 25, 2025, has issued the RBI (Authentication Mechanisms for Digital Payment Transactions) Directions, 2025. These directions are applicable to all payment system providers and payment system participants (banks and non-banks) and to all domestic digital payment transactions, unless specifically exempted. These will be effective April 1, 2026, mandating two-factor authentication for all transactions. Issuers must implement mechanisms for handling cross-border Card Not Present transactions by October 1, 2026, and register their bank identification numbers with card networks.
RBI, vide circular dated September 29, 2025, has issued directions to all scheduled commercial banks, all small finance banks and all payments banks revising the eligible limit for perpetual debt instruments denominated in foreign currency/rupee-denominated bonds overseas. Consequently, such instruments will be eligible for inclusion in Additional Tier 1 capital to a maximum of 1.5% of risk weighted assets as per the latest available financial statements (audited or subjected to limited review).
RBI, vide notification dated September 30, 2025, has notified the Foreign Exchange Management (Debt Instruments) (Fourth Amendment) Regulations, 2025, amending the Foreign Exchange Management (Debt Instruments) Regulations, 2019. The amendment aims to expand and clarify the scope of investment permissions for non-residents holding rupee accounts under the Foreign Exchange Management (Deposit) Regulations, 2016. The amendment now allows non-residents with rupee accounts to purchase or sell dated G-Secs/treasury bills and non-convertible debentures/bonds and commercial papers issued by an Indian company, as per terms and conditions specified by RBI (earlier, non-convertible debentures/bonds and commercial papers were not included).
RBI, vide notification dated September 29, 2025, has amended the RBI (Lending Against Gold and Silver Collateral) Directions, 2025, by permitting scheduled commercial banks or a tier 3 (three) or 4 (four) urban cooperative bank to extend need-based working capital finance to borrowers who use gold/silver as a raw material, or as an input in their manufacturing or industrial processing activity, for which such gold and silver may also be accepted as security. However, banks extending such finance are required to ensure that borrowers do not acquire or hold gold for investment or speculative purposes.
SEBI, vide notification dated September 8, 2025, has notified the SEBI (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2025 (“Amendment Regulations”). The Amendment Regulations introduce substantive changes to the disclosure framework for QIPs under Schedule VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The amendments are aimed at simplifying and streamlining the information included in placement documents for QIP. The objective of these amendments is to eliminate the repetitive content and align the QIP disclosures with information already available through periodic filings under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The revised approach marks a pivotal shift towards concise, issue-specific disclosures, recognising that qualified institutional buyers are sophisticated investors with access to extensive public information on listed issuers.
For a detailed analysis, please refer to the JSA Prism of September 13, 2025.
RBI has issued the new Master Directions on the Regulation of Payment Aggregators (“PAs”), effective September 15, 2025 (“New PA Directions”). It aims to standardise the regulatory framework and provide greater clarity to the payments sector. Key updates include explicit coverage of offline PAs, clarification of the RBI’s position on third‑party payouts and standardised merchant KYC practices for PAs. While the New PA Directions formalise many practices and offers welcome clarity, certain areas, most notably the classification of hybrid physical/online transactions and the wording around simplified KYC, may still require further clarification.
For a detailed analysis, please refer to the JSA Prism of September 18, 2025.
The Hon’ble Supreme Court of India (“Supreme Court”), in the case of IL&FS Financial Services Limited vs. Adhunik Meghalaya Steels Private Limited[1], has reaffirmed that entries in a company’s audited balance sheet constitute a valid acknowledgment of debt under Section 18 of the Limitation Act, 1963, even if the creditor is not expressly named. The Supreme Court clarified that such acknowledgment reflects a continuing jural relationship and is sufficient to extend limitation for initiating proceedings under the IBC. Importantly, the ruling also harmonises the application of the Supreme Court’s COVID-19 extension orders with the principle of acknowledgment, thereby providing critical guidance on computation of the limitation period. This decision is a significant reaffirmation of creditor rights, underscoring that statutory financial disclosures can effectively preserve limitation and ensure access to remedies under the IBC.
For a detailed analysis, please refer to the JSA Prism of September 2, 2025.
This Newsletter has been prepared by:
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Anish Mashruwala |
Srinjoy Bhattacherjee |
Swarna Hardikar |
Arpita Mittal |
For more details, please contact [email protected]
[1] Civil Appeal No. 5787 of 2025 (decided on July 30, 2025)
JSA advised the lead managers in the institutional placement of Units of IRB InvIT Fund (“InvIT”), which is India’s first InvIT. This was the largest institutional placement of Units by a publicly listed InvIT in India aggregating to INR 32,484.30 million. The InvIT is sponsored by IRB Infrastructure Developers Limited.
Kotak Mahindra Capital Company Limited, CLSA India Private Limited and Motilal Oswal Investment Advisors Limited acted as the lead managers to the transaction.
Our transaction team comprised Lead Partner – Arka Mookerjee, Partner – Pracheta Bhattacharya, Principal Associates – Sourav Modi and Ananth Balaji, and Associates – Jeebitesh Bhattacharya, Bhavna Sancheti, Aditya Shendye, Palak Karundia and Ayushi Pandit.
JSA Advocates & Solicitors advised Nuvama Wealth Management Limited in relation to the initial public offering of units of Anantam Highways Trust, an infrastructure investment trust, comprising an issuance of units aggregating to ₹4,000.00 million.
As part of the transaction, the InvIT has also acquired seven road assets, which operate on a hybrid annuity model, from Dilip Buildcon Limited and its associates, as well as from certain associates of Alpha Alternatives Holding Private Limited.
The Trust filed its final offer document with SEBI on October 13, 2025, and subsequently listed its Units on the stock exchanges on October 16, 2025.
The JSA team was led by Partner Arka Mookerjee, with support from the Equity Capital Markets team, comprising Partner Siddhartha Desai, Principal Associate Sourav Modi, and Associates Jeebitesh Bhattacharya and Vaishnavi Kokkonda.
JSA Advocates & Solicitors advised SBI Capital Markets Limited, Axis Capital Limited, and JM Financial Limited, the Book Running Lead Managers, in relation to the initial public offering (IPO) of equity shares of Canara Robeco Asset Management Company Limited.
The IPO comprised an offer for sale by the promoter selling shareholders, Canara Bank and ORIX Corporation Europe N.V., aggregating to ₹13,261.26 million.
The JSA team was led by Partner Arka Mookerjee, with support from the Equity Capital Markets team comprisingPartner Siddhartha Desai, Senior Associate Govind Roy, and Associates Prateek Khandelwal, Aditi Khandal, Bhuvnesh Kumar, and Sharad Panwar.
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