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Economic Times
a day ago
- Business
- Economic Times
India's investment trusts to expand debt fundraising as yields drop, analysts say
Debt fundraising by India's asset-backed investment trusts is expected to keep rising after exceeding $2 billion in the first half of 2025, as falling interest rates continue to fuel strong investor demand, analysts said. ADVERTISEMENT The real estate investment trusts (REIT) and infrastructure investment trusts (InvIT) raised over 178 billion rupees ($2.07 billion) in January-June, compared with 56 billion rupees in the same period last year, according to data aggregator Prime Database. "Bonds offer a lower cost of capital compared to traditional bank financing, especially for highly rated trusts with stable, long-term cash flows," Arka Mookerjee, partner at JSA Advocates and Solicitors, which provides legal advice to corporates. "The predictable income profiles of REITs and InvITs make them well-suited to debt financing, attracting institutional investors seeking yield-bearing, asset-backed instruments." Corporate bond yields have tumbled over the last few months, as the central bank infused liquidity and slashed interest rates by 100 basis points, while banks have lagged in lowering their lending rates. Embassy Office Parks REIT, IndiGrid Infrastructure Trust, Cube Highways Trust and Nexus Select Trust are among the firms that have tapped the bond market. Embassy REIT is planning another bond issue, Reuters reported last week, while others are also in early talks. ADVERTISEMENT Bonds typically have fewer restrictions than bank loans, allowing REITs to use the fund across multiple properties within the portfolio, said Lata Pillai, India senior managing director and head of capital markets, JLL, a global real estate services firm. The trusts, which need to disburse at least 90% of net distributable cash flows to unit holders, say cheaper funding allows them to provide better returns. ADVERTISEMENT Bond fundraising provides clarity to these trusts on planning their finances, while top credit ratings attract marquee investors such as mutual funds and insurers. "The AAA-rated structure gives greater credibility, visibility and better pricing," said Krishnan Iyer, chief executive officer at NDR InvIT, adding they also offer resilience to market volatility. ADVERTISEMENT With infrastructure and real estate sectors gaining momentum, investors see REITs and InvITs as a compelling blend of fixed-income stability and long-term growth, said Suresh Darak, founder of Bondbazaar, an online bond trading platform. ($1 = 86.1700 Indian rupees) ADVERTISEMENT (Reporting by Khushi Malhotra and Dharamraj Dhutia; Editing by Vijay Kishore)
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Business Standard
11-07-2025
- Business
- Business Standard
Making a 'will' isn't just for the ultra-rich: Here's why it matters
Drafting a 'will' is one of the simplest yet most overlooked steps in estate planning. Legal experts say that a properly executed 'will' ensures your assets are distributed according to your wishes and helps avoid disputes among family members. While the process is legally straightforward, many people delay it due to misconceptions or lack of awareness. Who can make a 'will' and how? 'A will is a legal declaration of how you want your assets distributed after your death,' says Shaishavi Kadakia, partner, Cyril Amarchand Mangaldas. 'Any Indian citizen over 18 years of age and of sound mind can make a Will, provided it is done voluntarily and without coercion.' The key requirements include: -The 'will' must be in writing (handwritten or typed). -It must be signed by the testator and attested by two independent witnesses who are not beneficiaries. -There is no need for stamp paper or notarisation. 'A typewritten will is preferable to avoid legibility issues,' Kadakia adds. 'Digital Wills are not recognised in India yet.' Is registering a 'will' necessary? Registration of a 'will' is not mandatory, but it provides additional legal strength. 'Registering a will under the Indian Registration Act adds credibility, discourages tampering, and ensures the document is safely stored with the Sub-Registrar's office,' explains Shweta Tungare, co-founder, 'While registration isn't compulsory, it creates a strong presumption of authenticity and helps mitigate challenges to its validity, especially in families where disputes are likely,' said Varun Sriram, partner, JSA Advocates and Solicitors. However, experts caution that registration does not make a will immune to legal challenges. 'Even an unregistered will, if properly signed and attested, is 100 per cent valid,' Tungare points out. Structuring a will to avoid disputes -Clarity and completeness are essential to avoid future conflicts. All the experts unanimously suggest: -Explaining any unequal distribution of assets to heirs. -Updating the will after major life events like marriage, birth, or purchase of property. -Destroying earlier wills once a new one is executed. -Appointing a neutral, trustworthy executor. Sriram advises including a 'residuary clause' to cover future or unlisted assets and detailing instructions for digital accounts. 'Ambiguity and omissions often lead to family conflict. Clarity is crucial,' he says. Common mistakes to avoid Experts caution against vague phrases like 'divide equally' or drafting separate 'wills' for different assets. Tungare adds, 'People often forget to update their will after major life changes or appoint unreliable witnesses, which can create disputes later.' Kadakia recommends seeking legal advice for anything more than a very simple 'will'. 'A single, comprehensive document ensures your wishes are carried out and reduces the risk of challenges.' He sums up, 'Making a will isn't just for the wealthy, it's a vital step for anyone with assets, however small, to secure peace for their family.'
Mint
09-07-2025
- Business
- Mint
Why Indian promoters are no longer rushing to delist
Fewer Indian companies are choosing to delist from stock exchanges, as buoyant market valuations and tighter pricing rules have made share buybacks increasingly expensive for promoters. Voluntary delistings peaked at 47 in FY19 before declining to 45 in FY22, 22 in FY23, 24 in FY24, and just 12 in FY25, the lowest in at least a decade, according to a Mint analysis of exchange data. Since FY21, 272 companies have listed on Indian exchanges, underscoring a broader trend: public markets are attracting more companies than they're losing. Delisting decisions are typically strategic, unlike initial public offerings (IPOs), which are timed to market cycles. A promoter may choose to delist a company to regain full control, to consolidate ownership after a private equity buyout, or to exit costly compliance obligations, especially in cases where trading volumes are low. In some cases, companies are forced to delist due to non-compliance, though these are treated as compulsory delistings. But even voluntary delistings have become harder. First, India's post-pandemic bull run pushed up share prices across the board. Since the delisting floor price is tied to historical trading averages, promoters are now expected to offer a significant premium above already-elevated levels. 'The main reason for promoters to not go ahead with delisting is on account of the bull market valuation," said Anand Lakra, partner at JSA Advocates and Solicitors. 'The expectation from shareholders is to obtain a high premium to the floor price, which is already high in a bull market and is causing the promoters not to embark on the delisting process." The Nifty 50's 10-year average price-to-earnings ratio was at 22.89x till its September 2024 peak and currently stands at 23.37x. Delisting in India requires the company's promoter to buy back all public shares. Until recently, this process relied mainly on the reverse book building (RBB) method, in which shareholders name the price at which they're willing to tender shares—often well above the floor or indicative price. But the RBB system frequently ran into trouble when institutional investors demanded steep premiums, citing hidden value in unlisted assets or real estate. 'The RBB system was often ineffective, especially when large investors quoted very high prices, knowing that the company held valuable assets not reflected in its traded stock price," said Arindam Ghosh, partner at Khaitan & Co. 'As a result, many delisting offers either failed or became too expensive for promoters to accept." One prominent example was Vedanta Ltd's failed delisting in October 2020. The company's promoters offered ₹87.5 per share to buy out public shareholders, but the bid failed after they didn't receive the minimum required acceptance. Media reports indicated shareholder bids went as high as ₹320 per share, making the offer financially unviable. To address these concerns, the Securities and Exchange Board of India (Sebi) introduced the adjusted book value (ABV) method in September 2024 to calculate the floor price for delisting. This method factors in unlisted subsidiaries, real estate and other hidden assets—often leading to valuations higher than what the public markets reflect. 'While this ensured a more accurate reflection of the company's true worth, in certain cases it further raised the floor price and made delisting even more financially burdensome for promoters," said Ghosh. 'Instead of simplifying the process, it appears this has led to fewer delisting offers, as promoters now face much higher payout obligations to exit the public markets," he added. Simultaneously, Sebi also introduced a fixed-price delisting option, alongside the existing reverse book building process. Under this route, promoters can offer to buy back all public shares at a fixed price that is at least 15% higher than the floor price. 'However, in certain cases the adjusted book value method had already pushed the floor price higher, which means more money for the promoter to shed, the new mode has not really picked up," said Ghosh. The case for staying public For some companies, delisting was once seen as a way to cut compliance costs and regulatory overhead. 'One of the reasons why companies choose to voluntarily delist is the compliance burden that comes with being publicly listed," said V Prashant Rao, director and head of equity capital markets at Anand Rathi Investment Banking. 'Firms with limited resources often struggle to meet quarterly reporting and other regulatory requirements, making the associated costs difficult to justify." But this mindset is evolving. Many promoters now see long-term upside in staying listed. 'Companies—both foreign and domestic—are recognizing the long-term value of remaining listed," said Bhavesh Shah, managing director and head of investment banking at Equirus Group. 'India's capital markets are in a sweet spot, flourishing with robust investor participation and strong backing for quality businesses. This is creating a powerful platform for sustained value creation and companies do not mind doing the compliance part to remain listed." 'Delisting now would mean opting out of that journey and denying stakeholders the opportunity to participate in the upside," he added. A generational shift in promoter mindset may also be playing a role. 'A new generation of promoters has emerged replacing older decision-makers and bringing a fresh perspective that views the capital market as a key opportunity for growth," said Tarun Singh, managing director and founder at Highbrow Securities. 'The Indian economy has stabilized over the past 10-15 years with a lower volatility seen in the markets as before. This, along with a steady inflow of new investors, has created an encouraging environment for companies to remain listed rather than exit the market," he added.
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Business Standard
08-07-2025
- Business
- Business Standard
Tax dept's AI tool 'not meant' for resolving political donation disputes
The Income-Tax Department's new AI-powered tool will help individual taxpayers, but for disputes relating to political donations or other such complex issues professional advice is irreplaceable, experts have said. TaxAssist is useful in responding to tax notices and correcting errors in returns in 'simple cases'. Political donations are a sensitive matter and undergo scrutiny to ensure transparency and prevent misuse of tax benefits. 'The Income-Tax Department flags political donations to check for fraudulent claims and verify that they are not made using unaccounted money,' said Surajkumar Shetty, partner at JSA Advocates and Solicitors. He explained that false claims can attract penalties of up to 200 per cent of the evaded tax, along with interest and even prosecution in extreme cases. Ritika Nayyar, partner at Singhania & Co, said donations are flagged if they appear disproportionate to the donor's income or are made to unregistered entities. 'Bogus or inflated donations, often used as a money laundering tool, are key grounds for suspicion,' she said. What TaxAssist can and cannot do TaxAssist uses artificial intelligence and data analytics to guide taxpayers in responding to notices and correcting errors in their returns. It offers automated alerts, identifies anomalies such as incorrect Section 80GGC claims, and walks users through filing corrections. 'TaxAssist is ideal for simple cases and new taxpayers. It helps in flagging mismatches and recommending corrections,' said Vishwanathan Iyer, senior associate professor of Finance at Great Lakes Institute of Management, Chennai. 'But for high-value or complex matters, professional counsel is still necessary.' Similarly, S R Patnaik, partner and head of taxation at Cyril Amarchand Mangaldas, advised caution. 'TaxAssist is a useful initiative, but given its novelty and lack of a performance track record, taxpayers with nuanced cases should consult experts,' he said. Documents you must keep handy If you have made political donations, maintain documents. According to Iyer, taxpayers should keep: -Official receipts from the political party or electoral trust -Bank statements showing payment through non-cash modes -Confirmation emails or acknowledgements from the recipient -The political party's PAN and registration details Nayyar said: 'Receipts should include the recipient's and donor's details, amount, date, and payment mode. Proof of payment through legitimate banking channels is essential since cash donations don't qualify for deductions.' Tax benefits under section 80GGC Political donations made via non-cash modes qualify for a 100 per cent deduction under Section 80GGC for individuals and certain other entities, provided the donation does not exceed the donor's total income. 'However, this benefit is only available under the old tax regime,' said Nayyar. Shetty added, 'To avoid tax notices, report donations clearly in your ITR, ensuring the recipient is a registered political party or electoral trust.'
Mint
11-06-2025
- Business
- Mint
Iqbal Khan steps down as national corporate lead from JSA
Mumbai: Iqbal Khan has stepped down as national corporate lead at JSA Advocates and Solicitors. Khan joined JSA from Shardul Amarchand Mangaldas in October 2024, along with a team of 18 lawyers, including three retained partners, strengthening mergers, acquisitions and private equity teams in JSA's corporate practice. "Iqbal Khan has communicated his resignation to JSA. The exit modalities will be worked out mutually keeping in mind the interest of clients, teams involved and the firm,' Vivek Chandy, JSA's managing partner, said in a statement on Wednesday. 'JSA has grown exponentially over the last 18 months and has integrated well with all its lateral partners who are aligned with the culture and values of the firm. The firm will continue to aggressively pursue its growth path and wishes Iqbal well." Khan's exit comes as top law firms witness mass movement to rivals. He was brought into JSA to work closely with the joint managing partners, practice area chairs, and the executive committee to fortify the firm's corporate practice and augment its range of services. Prior to joining JSA, he was with Paul Weiss and Kirkland & Ellis in the United States. Khan also holds a J.D. from Columbia Law School (Harlan Fiske Stone Scholar); the Parker School Certificate for Achievement in International and Comparative Law; and LLB from the London School of Economics and Political Science. He was the editor of the Columbia Journal of European Law and has been ranked as one of the top M&A and private equity lawyers in India by various legal rankings. Prior to joining JSA, Khan, along with his partners, led deals for clients including Advent, Bain, Brookfield, TPG, Biocon, L&T, LIC, PharmEasy, Reliance, Serum and Tata.
