The corporate governance norms prescribed by SEBI were tightened earlier this month (as discussed here), whereby the requirement of independence of directors has been made more stringent. However, it is disheartening to note that while there is a move by the regulator to enhance mandatory norms on corporate governance at a substantive level, there is a lot still left to be desired when it comes...
REMFs: The New Indian Real Estate Investment Opportunity
It was back in 2006 that SEBI had cleared the deck for the launch of real estate mutual funds (REMFs) as means to enable retail investors to take advantage of the enhancement in Indian property prices. For almost two years, there were no concrete steps taken to promulgate regulations for the establishment of REMFs. However, on April 25, 2008, SEBI announced amendments to the SEBI (Mutual Funds)...
Success of Venture Capital Investments in India
One of our readers, Aravind Balajee, brings to our attention this story from VC Circle. It relates to a tremendously successful exit by a venture capital investor, UTI Ventures, from an Indian portfolio company, Excelsoft Technologies Pvt. Ltd. The details are here: “There is a thing or two to learn from this exit deal of UTI Ventures. One is that the Indian software product companies are not all...
Role of Law and Politics in India’s Economic Growth
There is a recent paper titled “Law, Finance, and Politics: The Case of India” by John Armour and Priya Lele that has been posted on SSRN. The authors join the debate as to whether a country’s legal origins (e.g. common law or civil law) necessarily have an impact on the extent of its financial development, and in doing so, they examine India as a case study. The authors find that in India’s...
New Merger Norms for Telcos
The Indian telecommunications industry has witnessed significant consolidation over the last few years, with several large scale investments and mergers having occurred in this space. The Department of Telecommunications (DOT) has now issued Guidelines for intra-circle merger of licencees, which seek to strengthen DOT’s control and oversight of such mergers. While these guidelines incorporate...
Disclosure Norms for Law Firms
So far, public listings of securities by law firms has not caught on despite the first law firm (Australia’s Slater & Gordon) listing about a year ago. The legal practice regulations in most jurisdictions do not permit law firms to either take a corporate form or to issue its securities to the public. But, if law firms are permitted to go public, and indeed if they do so, they would be...
SEBI Pricing Norms & Private Equity
When the market prices of companies in India are lower than what they were a few months ago, they would obviously be attractive to private equity funds and similar investors. However, the SEBI minimum pricing norms as set out in Chapter XIII of the SEBI (Disclosure & Investor Protection) Guidelines, 2000 are hampering deals in these market conditions, as this report by INDIA PE suggests. The...
Dispute Resolution under the New Company Law
The establishment of the National Company Law Tribunal (NCLT) has been mired in controversy right from the start. Although the Companies Act was amended as early as 2002 to pave the way for the NCLT, the body is yet to be established (and the relevant provisions of the Amendment Act of 2002 are yet to be notified) as several aspects of its constitution and functioning have been the subject matter...
Consolidation in the Indian Financial Sector
The financial services sector in India (both in the banking and non-banking finance industry) has witnessed consolidation over the last few years through various mergers & acquisitions. This trend will perhaps continue in the future as well. A recent speech by V. Leeladhar, Deputy Governor of the Reserve Bank of India contains a good overview of the statutory and regulatory framework that...
Short Selling is Here
We had carried an earlier post commenting on the proposed introduction of short selling on the Indian stock exchanges and discussing the broad implications of that move. Short selling is now being implemented with effect from Monday, April 21, 2008, and the Bombay Stock Exchange as well as the National Stock Exchange have installed their securities lending and borrowing (SLB) mechanisms in...
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