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Debt Funding in India’ Modes of Funding: An introduction

Debt Funding in India’ Modes of Funding: An introduction

Posted by By at 3 November, at 19 : 47 PM Print


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November 03, 2020

DEBT FUNDING IN INDIA

While debt funding has always been preferred for investors, the Covid-19 pandemic’s impact on business and valuations has resulted in debt becoming, in some cases, the only viable mode for investment for investors. As globally, debt funding provides investors downside protection, assured returns and security interest against the sums advanced.

Over the last few years, structured debt is becoming more and more popular, which provides investors downside protection, with equity ‘kickers’ to provide them equity upside as well. Venture debt investments, tracking stocks or market linked debentures, non-convertible debentures with varying redemption premia are some of the newer modes of funding which have emerged, in light of changing needs of the investors and borrowers alike. Currently to assuage valuation mismatches between the investors and the investee, debt funding has again come to the fray.

Debt investment into India requires a host of aspects to be considered. These include the potential options or routes for funding into India, the tax considerations for investment under the various options, security creation and exchange control norms.

In this series, the ‘Debt Funding in India’ (“Series”), we would be covering various of these aspects.

In this first part of the Series, we briefly look at the various routes available for global investors for debt investments into India which can be accessed here. We will deal with each of these routes and more in subsequent pieces in this series.

– Debt Funding TeamYou can direct your queries or comments to the authors



Benchmark Litigation Asia-Pacific: Tier 1 for Government & Regulatory and Tax
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Legal500 Asia-Pacific: Tier 1 for Tax, Investment Funds, Labour & Employment and TMT
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Chambers and Partners Asia-Pacific: Band 1 for Employment, Lifesciences, Tax and TMT
2020, 2019, 2018, 2017, 2016, 2015

IFLR1000: Tier 1 for Private Equity and Project Development: Telecommunications Networks.
2020, 2019, 2018, 2017, 2014

AsiaLaw Asia-Pacific Guide 2020: Ranked ‘Outstanding’ for TMT, Labour & Employment, Private Equity, Regulatory and Tax

FT Innovative Lawyers Asia Pacific 2019 Awards: NDA ranked 2nd in the Most Innovative Law Firm category (Asia-Pacific Headquartered)

RSG-Financial Times: India’s Most Innovative Law Firm
2019, 2017, 2016, 2015, 2014

Who’s Who Legal 2019:
Nishith Desai, Corporate Tax and Private Funds – Thought Leader
Vikram Shroff, HR and Employment Law- Global Thought Leader
Vaibhav Parikh, Data Practices – Thought Leader (India)
Dr. Milind Antani, Pharma & Healthcare – only Indian Lawyer to be recognized for ‘Life sciences – Regulatory,’ for 5 years consecutively

Merger Market 2018:Fastest growing M&A Law Firm in India


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