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Initial Public Offering of Transrail Lighting Limited

JSA advised Inga Ventures Private Limited, Axis Capital Limited, HDFC Bank Limited and IDBI Capital Markets & Securities Limited in relation to the initial public offering of equity shares of Transrail Lighting Limited aggregating to ₹8,389.12 million (“IPO”).

Transrail Lighting Limtied is an Indian engineering, procurement and construction (“EPC”) company, primarily focussing on power transmission and distribution business and integrated manufacturing facilities for lattice structures, conductors, and monopoles.

Our Transaction Team Comprised Lead Partner – Arka Mookerjee, Partner – Pracheta Bhattacharya, and Associates – Govind Roy and Anvita Sinha.

Tags IPO, JSA, Leading Law Firm, Leading Lawyers

JSA Finance Newsletter | November Edition 2024

Please click here to download the document as a PDF.

This Newsletter sets out some of the key legislative and regulatory updates in the banking and finance, funds and insolvency space for the month of November 2024.

Sovereign green bonds included as specified securities under the Fully Accessible Route

The Reserve Bank of India (“RBI”), vide various circulars, has specified categories of government securities that are eligible for investment under the Fully Accessible Route (“FAR”). Further to this, RBI, vide circular dated November 7, 2024, has designated sovereign green bonds of 10 (ten) year tenor issued by the Government of India in the second half of the fiscal year 2024-25 as ‘specified securities’ under the FAR.

Reporting of foreign exchange transactions to Trade Repository

RBI, vide circular dated November 8, 2024, has issued a clarification regarding reporting of foreign exchange transactions to the Trade Repository (“TR”).

To ensure completeness of transaction data in the TR for all foreign exchange instruments, the reporting requirement will now include foreign exchange spot (including value cash and value tom) deals in a phased manner. Accordingly, transactions in the following foreign exchange contracts involving Indian Rupees or otherwise (“FX Contracts”), must now be reported to the TR:

foreign exchange cash;
foreign exchange tom; and
foreign exchange spot.

The following FX Contracts executed with clients must be mandatorily reported as per the following timelines:

FX Contracts with the value equal to or exceeding the threshold limit of USD 1,000,000 (US Dollars one million) and equivalent thereof in other currencies with effect from May 12, 2025;
FX Contracts with the value equal to or exceeding the threshold limit of USD 50,000 (US Dollars fifty thousand) and equivalent thereof in other currencies with effect from November 10, 2025; and
FX Contracts executed with clients should be reported before 12:00 noon of the following business day.

Relaxation from certain provisions for units allotted to an employee benefit trust by Infrastructure Investment Trusts and Real Estate Investment Trusts

The Securities and Exchange Board of India (“SEBI”), vide notifications dated November 13, 2024, has made some relaxations and aligned distribution timelines for Real Estate Investment Trusts (“REITs”) and Infrastructure Investment Trusts (“InvITs”) to promote ease of doing business. Some of the key changes are as follows:

the 1 (one) year lock-in on units allotted to persons other than the sponsor(s), the 6 (six) months lock-in on pre-preferential issue unitholding of the allottees, and allotment related restrictions on preferential issue of units will not apply to the units allotted to an employee benefit trust for the purpose of a unit-based employee benefit scheme in compliance with Chapter IVB of the SEBI (Infrastructure Investment Trusts) Regulations, 2014; and
the manner of distribution of unclaimed or unpaid amounts has been prescribed. Where a distribution has been made by the investment manager within the timelines specified under respective InvIT/REITs regulations, but the payment to any unitholders has remained unpaid or unclaimed, the investment manager must, within 7 (seven) working days from the date of expiry of the prescribed timelines, transfer such unclaimed amounts to an escrow account to be opened by it on behalf of the InvIT/REIT in any scheduled bank. Such account will be termed as the ‘Unpaid Distribution Account’.

Rights of investors of a scheme of an Alternate Investment Fund

SEBI, vide notification dated November 18, 2024, has notified the SEBI (Alternative Investment Funds) (Fifth Amendment) Regulations, 2024 amending the SEBI (Alternative Investment Funds) Regulations, 2012. Regulations 20(21) and 20(22) has been inserted which deals with the rights of investors of a scheme of an Alternative Investment Fund (“AIF”). Some of the key amendments are as follows:

the investors of a scheme of an AIF must have rights, pro-rata to their commitment to the scheme, in each investment of the scheme and in the distribution of proceeds of such investment, except as may be specified by SEBI. The rights of investors of schemes of an AIF issued prior to this amendment, which are not pro-rata to their commitment to the scheme and not exempted by SEBI, must be dealt with in the manner specified by SEBI; and
the rights of investors of a scheme of an AIF, other than that specified above, must be pari passu in all aspects However, differential rights may be offered to select investors of a scheme of an AIF, in the manner as may be specified by SEBI, without affecting the interest of other investors of the scheme. This requirement will not apply to large value fund for accredited investors. Further, any differential right already issued by an AIF to select investors of a scheme of an AIF, prior to this amendment must be dealt with in the manner as specified by SEBI.

Master Circular for Credit Rating Agencies amended

SEBI, vide circular dated November 18, 2024, has amended Para 15.3 of the Master Circular for Credit Rating Agencies (“CRAs”) dated May 16, 2024. Pursuant to COVID-19, a provision on post-default curing period was introduced which mandated CRAs to frame a policy in respect of upgrade of default rating to investment grade rating. The policy could include scenarios like technical defaults, change in management and acquisition by another firm which fundamentally alter the credit risk profile of the defaulting firm. The term ‘technical defaults’ now stands deleted. Further, in the scenario of non-payment of debt due to reasons beyond the control of the issuer, namely, failure to remit payment due to absence of correct information or due to incorrect or dormant investor account furnished by the investor(s) or due to notice/ instruction received from a government authority to freeze the account of investor(s), the CRA must confirm and verify the availability of adequate funds with the issuer and confirm and verify details relating to any failure to repay the debt.

SEBI buy-back regulations amended

SEBI, vide circular dated November 20, 2024, has notified the SEBI (Buy-Back of Securities) (Second Amendment) Regulations, 2024 amending the SEBI (Buy-Back of Securities) Regulations, 2018. Some of the key amendments are as follows:

a buy-back offer must open not later than 4 (four) working days from the date of public announcement (earlier this was the record date);
in case any member of the promoter/promoter group has declared its intention to not participate in the buy-back, the shares held by such member of the promoter/promoter group will not be considered for computing the entitlement ratio;
the restriction on issuance of any shares or other specified securities including by way of bonus till the date of expiry of buyback period for the offer will not apply to any issuance in discharge of subsisting obligations through conversion of warrants, stock option schemes, sweat equity or conversion of preference shares or debentures into equity shares; and
the cover page of the letter of offer should explicitly cover following details: (a) the entitlement ratio for small and general shareholders; (b) web-link to website of the registrar and share transfer agent for shareholders to check their entitlement under the buyback.

International Financial Services Centres Authority

Certain entities exempted from the International Financial Services Centres Authority (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022

The International Financial Services Centres Authority (“IFSCA”), vide circular dated November 18, 2024, has exempted the following entities/activities from the applicability of the IFSCA (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022 (“Guidelines”):

‘Global-in-House Centre’ registered under the IFSCA (Global In-House Centres) Regulations, 2020;
‘International Branch Campus’ or an ‘Offshore Educational Centre’ of a foreign university or a foreign educational institution registered under the IFSCA (Setting up and Operation of International Branch Campuses and Offshore Education Centres) Regulations, 2022;
‘Financial Crime Compliance Services Provider’ registered under the IFSCA (Book-keeping, Accounting, Taxation and Financial Crime Compliance Services) Regulations, 2024; and
a financial institution providing services only to the entities in its ‘Financial Group’ which are located in a country not identified in the public statement of financial action task force as ‘High-risk jurisdictions subject to call for action’.

IFSCA, on November 22, 2024, further amended the Guidelines. Some of the key amendments are as follows:

the regulated entity must adhere to the countermeasures when called upon to do so by any international or intergovernmental organisation of which India is a member and accepted by the Central Government; and
a regulated entity which is part of a financial group must ensure that it provides its group-wide compliance, audit and anti-money laundering/countering the financing of terrorism functions of customer, account, and transaction information from its branches and subsidiaries, including information and analysis of transactions or activities which appear unusual, if such analysis has been conducted, when necessary for the purposes of money laundering/terrorism financing risk management. Similarly, branches and subsidiaries should receive such information from these group-level functions when it is relevant and appropriate for effective risk management.

New regulations for registration of factors and the assignment of receivables within International Financial Services Centres

IFSCA, vide circular dated November 18, 2024, issued the IFSCA (Registration of Factors and Registration of Assignment of Receivables) Regulations, 2024. These regulations aim to provide for the manner of granting certificate of registration to factors and filing of particulars of transactions with the Central Registry by a Trade Receivable Discounting System (“TReDS”) on behalf of the factors. Some of the key features of the regulations are as follows:

every factor, intending to commence factoring business in an International Financial Services Centre must make an application to the IFSCA for grant of certificate of registration; a factor or entities other than factors, meeting such eligibility criteria as specified by the IFSCA, may undertake the factoring business with the assignor directly or through an International Trade Financing Services platform; and
the trade receivables financed through a TReDS must be filed with the Central Registry, by the concerned TReDS on behalf of the factor, within a period of 10 (ten) days, from the date of such assignment or satisfaction thereof, as the case may be.

JSA Update

Supreme Court of India orders for liquidation of Jet Airways (India) Limited and recommends reform in the Insolvency and Bankruptcy Code, 2016

The Hon’ble Supreme Court of India (“Supreme Court”) ordered for liquidation of Jet Airways (India) Limited, exercising the plenary powers under Article 142 of the Constitution of India, considering, inter alia, the passage of more than 5 (five) years since the approval of resolution plan. Interestingly, the Supreme Court referred to this prolonged litigation as an ‘eye-opener’, and highlighted deficiencies in the working of Insolvency and Bankruptcy Code, 2016 as well as in the functioning of National Company Law Tribunal and the National Company Law Appellate Tribunal. The Supreme Court has, therefore, given key suggestions for reform in the Insolvency and Bankruptcy Code, 2016.

For a detailed analysis, please refer to the JSA Prism of November 19, 2024.

This Newsletter has been prepared by:

Anish Mashruwala
Partner

Sumitava Basu
Partner

Arpita Mittal
Associate

For more details, please contact [email protected]

Tags Finance, JSA, Leading Law Firm, Leading Lawyers, Legal Updates

NBFC loans: Balancing growth and risk in a changing landscape

The banking landscape in India is fast progressing with the emergence of innovative financial products, which require a robust credit pipeline. With the increasing demand for credit, non-banking financial institutions (NBFCs) have stepped in to play their part in the development.

Please click here to read the full article by Nand Gopal Anand, Vrindesh Patel and Aanand Kishore, published in Financial Express.

Tags Banking and Finance, JSA, Leading Law Firm, Leading Lawyers, NBFCs

JSA Brief | November 2024

This edition of the JSA Brief showcases JSA authored articles, updates & newsletters and achievements such as deals and events in all practice area over the preceding month (November 2024).

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 Articles, Deal Making, Events, JSA, JSA Prism, Legal Updates, Newsletters, Publications, Recognitions

Initial Public Offering of Suraksha Diagnostic Limited

JSA advised ICICI Securities Limited, Nuvama Wealth Management Limitedand SBI Capital Markets Limited in relation to the initial public offering of equity shares of Suraksha Diagnostic Limited aggregating to ₹8,462.49 million (“IPO”), comprising of an offer for sale by OrbiMed Asia II Mauritius Limited, Dr. Somnath Chatterjee, Ritu Mittal, Satish Kumar Verma, Munna Lal Kejriwal and Santosh Kumar Kejriwal.

Suraksha Diagnostic Limited offers one-stop integrated solutions for pathology and radiology testing and medical consultation services through their operational network consisting of a central reference laboratory, satellite laboratories, diagnostic centres, and sample collection centres.

Our Transaction Team Comprised Lead Partner – Arka Mookerjee, Partner – Pracheta Bhattacharya, Senior Associate – Sourav Modi, and Associates – Dhvanit Kothari, Jeebitesh Bhattacharya, Ankesh Kumar, and Junior Associate – Anoop Mukundan.

Tags Banking and Finance, IPO, JSA, Leading Law Firm, Leading Lawyers

Co-financing by Citibank N.A. and DEG – Deutsche Investitions-und Entwicklungsgesellschaft mbH to CreditAccess Grameen Limited

JSA advised the lenders Citibank N.A. (“Citi”) and DEG – Deutsche Investitions– und Entwicklungsgesellschaft mbH (“DEG”) in relation to the co-financing extended to CreditAccess Grameen Limited (“CAG”) by way of INR term loan facilities aggregating to INR 170,00,00,000 extended by Citi and external commercial borrowing aggregating to EUR 25,000,000 extended by DEG (collectively, “Facilities”).

The proceeds from the Facilities is proposed be utilised by CAG for providing microfinance services to women entrepreneurs predominantly in rural areas. This long-tenor co-financing arrangement is one of its kind in the Indian microfinance industry, representing a significant step in strengthening CAG’s funding profile to further its mission of providing affordable financial services to women entrepreneurs across India.

Our Transaction Team Comprised Lead Partner – Tirthankar Datta, Senior Associate – Sagar Srivastava and Associate – Ciol Kumar.

Tags Investment, JSA, Leading Law Firm, Leading Lawyers

JSA Prism | Finance | December 2024

Revisiting the amendments carried out in calendar year 2024 by the Securities Exchange Board of India to issuance and listing of non-convertible securities

The Securities and Exchange Board of India (“SEBI”) has brough about an array of amendments in the calendar year 2024 with respect to the SEBI (Issue and Listing of Non-Convertible Securities) Regulations and master circular for Issue and Listing of Non-Convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper, governing the issue and listing of non-convertible securities. This edition of Prism brings together all these amendments in one place in a tabular form and for ease of perusal provides a comparison against the earlier provisions.

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 Debt, JSA, JSA Prism, Leading Law Firm, Leading Lawyers, Legal Updates, SEBI

JSA Prism | Real Estate | December 2024

Please click here to download the Prism as a PDF.

Revocation of gift deeds: The Supreme Court’s interpretation of Section 126 of the Transfer of Property Act, 1882

The Hon’ble Supreme Court of India (“Supreme Court”) recently in N. Thajudeen vs. Tamil Nadu Khadi and Village Industries Board[1], examined the questions around revocation of a gift deed inter alia in terms of Section 126 of the Transfer of Property Act, 1882 (“TOPA”). At the outset, the Hon’ble Supreme Court concluded that the gift deed in question: (a) was accepted by the donee as stated in the deed itself; (b) had no provisions to indicate of any agreement on its revocation under any circumstances or at will; and (c) was not in the form of a contract that could otherwise be rescinded. Accordingly, the test under Section 126 of TOPA were not satisfied for valid revocation, and the Supreme Court hence concluded that the revocation of the gift deed in the said matter was void ab initio and dismissed the appeal on that and other grounds.

Brief facts

The appellant in this case (“Appellant”) executed a Gift Deed dated March 5, 1983 (“Gift Deed”) gifting a property situated in Cuddalore district of Tamil Nadu in favour of The Tamil Nadu Khadi and Village Industries Board (“Respondent”). In terms of the Gift Deed, the property was gifted for the purpose of manufacturing khadi-lungi, khadi yarn, etc, with the condition that the Respondent must not transfer the said suit property for its own self-interest. The Appellant executed a Revocation Deed dated August 17, 1987 (“Revocation Deed”) revoking the gift made pursuant to the Gift Deed.

The Respondent filed a suit for declaration of title and recovery of possession of the said property, which was dismissed by the trial court on the ground that the Gift Deed was not valid as it was never accepted and acted upon. The Respondent preferred an appeal before the district court, which reversed the order of the trial court and decreed the suit. In decreeing the suit, the district court held that the gift had been accepted, acted upon, was valid and that in the absence of any clause in the Gift Deed authorising revocation, the Gift Deed could not have been revoked. The second appeal filed by the Appellant before the Madras High Court was dismissed. Thereafter, the Appellant filed a special leave petition before the Supreme Court.

Issues

The following substantive issues came up for consideration before the Supreme Court:

whether the Gift Deed was accepted and the gift valid? and
whether the Gift Deed had been validly revoked vide the Revocation Deed?

Analysis and findings

On the first issue, the Supreme Court examined the Gift Deed and certain other facts to ascertain if the gift had been accepted. The Supreme Court noted that the Gift Deed itself stated that the gift stood accepted by the Respondent from the date of the Gift Deed and that the suit property had been accepted for the purpose of manufacturing khadi-lungi, khadi-yarn, etc. The Supreme Court determined that this was sufficient proof of acceptance. Further, the Supreme Court noted that pursuant to the acceptance of the Gift Deed, the Respondent had applied for the mutation of its name to the revenue authorities; and had also issued a memo on September 16, 1983 which proved that the Respondent had taken possession of the suit property and had proceeded to construct on it. Basis the aforesaid, the Supreme Court concluded that the gift had been accepted and duly acted upon by the Respondent and hence cannot be held to be invalid for want of acceptance.

On the second issue relating to the revocation, the Supreme Court noted from the facts that: (a) as per the Gift Deed, neither the Appellant nor his legal heirs would have or continue to have any right or interest in the suit property from the time and date of the Gift Deed; (b) the gift was with the Appellant’s full consent and from the date of the gift itself; and (c) the Respondent had accepted the suit property for the use and purpose specified therein. Accordingly, the Supreme Court concluded that the gift was absolute with no right reserved for its revocation in any contingency.

Further the Supreme Court held that a gift that is validly made can be suspended or revoked only under certain contingencies as contemplated under Section 126 of the TOPA. As per Section 126 of the TOPA: (a) a gift may be suspended or revoked, as agreed between the donor and donee, on the happening of any specified event which does not depend on the will of the donor; and (b) a gift may also be revoked in any of the cases (save want or failure of consideration) in which, if it were a contract, it might be rescinded. Section 126 of the TOPA also states that a gift in which the parties agree that it can be revoked at the mere will of the donor will be void wholly or in part.

The Supreme Court analysed whether any of the contingencies under Section 126 of the TOPA are applicable to the present case and noted that: (a) there is no indication under the Gift Deed that the Appellant and the Respondent have agreed for the revocation of the Gift Deed for any reason, much less on the happening of any specified event. Hence the first exception permitting revocation of the Gift Deed was not attracted; and (b) the Gift Deed was not in the form of a contract that could be rescinded and hence the second exception was also not attracted. Basis the above, the Supreme Court held that the revocation was invalid and the Revocation Deed was void ab initio and of no consequence.

Separately, the Supreme Court also held that the non-utilisation of the suit property for the stated purpose (i.e. manufacturing khadi-lungi, khadi-yarn, etc.), and keeping it vacant, while being a disobedience of the object of the gift, by itself would not attract the power to revoke the Gift Deed. Particularly, such revocation would not be valid if there is no stipulation in the Gift Deed that the gift could be revoked if the suit property was not utilised for the stated purpose.

In addition to the aforesaid substantive issues, the Supreme Court also considered the Appellant’s argument that the suit filed by the Respondent is barred by limitation since it was not filed within 3 (three) years from the date of Revocation Deed. On this issue the Supreme Court held that once the Gift Deed was validly executed and had resulted in the absolute transfer of title in favour of the Respondent, the same was not liable to be revoked, and as such the Revocation Deed was meaningless especially for the purposes of calculating the period of limitation for instituting the suit. In the case at hand, the Supreme Court noted that the suit was not simply for the declaration of title but rather for a further relief for recovery of possession. Accordingly, the Supreme Court held that in a suit for declaration of title, when an additional relief is claimed beyond the mere declaration, the declaration of title becomes ancillary to the primary relief sought. For the purposes of limitation, the suit is governed by the limitation period applicable to the additional relief claimed. As the further relief sought was for the recovery of possession based on title, the limitation would be 12 (twelve) years in terms of Article 65 of the Schedule to the Limitation Act, 1963. The Supreme Court hence held that the present suit was within the prescribed limitation period.

Conclusion

The Supreme Court thus held that: (a) in the present case since the Gift Deed was accepted and acted upon, it could not be revoked since there was no express right to do revoke included in the deed; and (b) in any case the provisions under Section 126 of the TOPA were not satisfied for such revocation. Accordingly, the Revocation Deed was void ab initio and of no legal effect. The Supreme Court further noted that while the suit property was not used for the intended purpose (i.e. manufacturing of khadi goods), this by itself would not attract the power to revoke the Gift Deed since the Gift Deed did not stipulate revocation for non-utilisation of the suit property for the stated purpose.

This Prism has been prepared by:

Varun Sriram
Partner

Varsha Srinivasan
Principal Associate

Bharkavi S
Senior Associate

For more details, please contact [email protected].

[1] Civil appeal no. 6333 of 2013

Tags JSA, JSA Prism, Leading Law Firm, Leading Lawyers, Legal Updates, Real Estate, Supreme Court, Transfer of Property Act

JSA Mint Video & Podcast Series | Episode 3: Financing India’s Growth Story

In this comprehensive episode of Transforming India: The Road to 2047, host Sachin Kalbag explores how India’s financial sector can drive the country towards a $30 trillion economy by 2047.

Join experts Arka Mookerjee and Soumitra Majumdar, Partners at JSA Advocates & Solicitors, as they delve into essential topics such as the Insolvency and Bankruptcy Code (IBC), capital market growth, infrastructure investments, and the role of innovative financial instruments. Discover the impact of legal reforms, digital advancements, and financial literacy on enhancing India’s financial ecosystem.

The conversation embraces critical areas like corporate governance, regulatory frameworks, sustainability, and green finance, highlighting how India can attract foreign and domestic investments, ensure financial stability, and promote inclusive growth amidst global challenges.

Tags Insolvency and Bankruptcy Code, JSA, Leading Law Firm, Leading Lawyers

JSA advised State Bank of India in the issue of US$ 500 Million Bonds under the US$ 10 Billion Medium Term Note Programme

JSA advised State Bank of India (SBI) , India’s largest lender, in the issue of US$ 500 Million Bonds under its US$ 10 Billion Medium Term Note Programme.

JSA also advised and facilitated the listing of the US$ Bonds on the Global Securities Market of India International Exchange (IFSC) Limited, India’s international stock exchange at the IFSC GIFT City.

This SBI’s US$ Bonds benchmark issuance was successfully completed amid volatility in the international markets, including various geo- political factors. The US$ Bonds issuance had one of the tightest spreads witnessed by an Indian financial institution and received a very good demand from global investors.

Our Transaction Team Comprised Lead Partner – Anish Mashruwala and Partner – Uttara Kolhatkar.