Lenders Law

Insider-trading enforcement is relatively straightforward when the facts fit the conventional pattern: a person connected with the company obtains UPSI, trades shortly before the announcement and benefits when the information becomes public. However, the more difficult cases are those that fall outside this obvious pattern. Consider the following situation: (i) Sometime in January, Investor Z purchased the shares of Company A; (ii) In February, Company A initiates discussions w.r.t. acquisition with Company B; (iii) In March, the aforesaid transaction is put on hold; (iv) From April to June, there was again no discussion on (ii); (v) Then, suddenly, in July, there is a public announcement regarding the transaction. Assumptions here: 1. Investor Z has no formal connection with either Company A or Company B; 2. Investor Z makes a substantial gain out the transaction referred to above. As legal experts, the following issues arise for our consideration: (a) Can a mer...

On 8 November 2025, the Securities and Exchange Board of India (SEBI) issued a strong cautionary advisory warning the public about the risks associated with Digital Gold/ E-Gold products offered on various digital platforms. This warning arrives at a time when fintech ecosystems are aggressively promoting digital gold through festive campaigns, ₹1 gold sales, jackpot offers, and even celebrity- driven, game show inspired advertisements . This widening gap between regulatory reality and advertising-driven perception demands a public conversation. 1. What SEBI Has Clarified: SEBI emphasizes that digital gold products: Not a security under the Securities Contracts Regulation Act (SCRA); Not a commodity derivative under the SEBI Act; Not an Electronic Gold Receipts (EGR) or Exchange Traded Funds (ETF) under relevant SEBI frameworks; Not issued by a government or regulated financial intermediary; SEBI has no jurisdiction over digital-gold issuers or platforms. This creates a regu...

For years, Indian startups set up holding companies abroad — commonly in Singapore or the US — to access global venture capital, enable easier exits, and leverage favorable regulations. However, a new trend is emerging: reverse flipping , where startups shift their headquarters back to India . This strategic move is driven by several factors. Why Startups Are Opting for Reverse Flipping IPO Readiness in Indian Markets: Simplifies compliance, reporting, and regulatory approvals for domestic IPOs. Access to Domestic Capital: Indian VCs and institutional investors increasingly prefer companies with a domestic presence. Policy Reforms (MCA/RBI): Regulatory clarity has reduced barriers to reverse flipping. Strategic Alignment: Being India-domiciled strengthens relationships with domestic customers, investors, and partners. Reverse flipping is no longer just a strategic option — it’s becoming a mainstream approach for startups preparing f...

CAT-II vs CAT-III AIFs S. No. Criteria Category II AIF Category III AIF 1 Investment Limit Accredited investors can invest up to 50% of investable funds in an investee company. Limit is 20% of investable funds in an investee company. 2 Tenure Close-ended, minimum 3 years. Open-ended or close-ended. 3 Investment Focus Primarily unlisted securities and/or listed debt rated ‘A’ or below. Listed/unlisted securities, derivatives, other AIFs, structured products, commodities, CDS. 4 Leverage Not permitted. Permitted up to 2x NAV through derivatives/borrowing. 5 Valuation Independent valuer once a year. NAV disclosure quarterly (close-ended) / monthly (open-ended). ...

India’s digital transformation has streamlined the entire banking and financial services through Aadhaar, e-KYC, and video-based verification[1]. However, these systems have posed severe barriers for persons with disabilities, particularly acid attack survivors with facial/ eye disfigurements and individuals with blindness. Recognising this, the Hon’ble Supreme Court in Pragya Prasun & Ors. vs. Union of India  issued a landmark judgment on 30th April 2025, mandating inclusive reforms in KYC processes. In this regard, the Securities Exchange Board of India had earlier issued a circular no. SEBI/HO/MIRSD/SECFATF/P/CIR/2025/74 dated 23rd May, 2025, directing all its intermediaries to comply with the said Supreme Court Order. Now, on 14th August, 2025, the Reserve Bank of India has issued a notification no. RBI/2025-26/74 , wherein it has directed that all regulated entities shall mandatorily undertake appropriate measures in this regard.  Background:  Two writ petitions...

On July 29, 2025, RBI released "Investment in AIF Directions, 2025" —applicable to NBFCs and other Regulated Entities (REs). A closer legal look reveals a strong regulatory intent: curb indirect evergreening and tighten capital discipline. Key highlights: 1️⃣ 10% Cap per RE & 20% Collective Cap across all REs in an AIF scheme. 2️⃣ If an RE contributes >5% to an AIF that makes non-equity investments in RE’s own debtor company, RE must make 100% provision to the extent of its proportionate indirect exposure. 3️⃣ If an RE subscribes to subordinated units of an AIF, the investment must be entirely deducted from capital funds (Tier-1 & Tier-2). 🔍 Legal and compliance teams at NBFCs must now revisit: - Their AIF investment approval matrices; - Existing exposures vis-à-vis related-party/indirect lending; - Tier-1 capital impact under the revised approach. This is not just a compliance update — it’s a strategic recalibration of how structured exposure via AIFs is view...