Private Equity Archives - Page 4 of 5

Data Centres in India: Opportunity and Incentives

Insights & Updates | April 4, 2023 | Practice Area: Data, Mergers and Acquisitions, Private Equity, Regulatory, Technology; Media and Telecommunications

In the backdrop of India’s growth story as a major IT-ITes hub in the last two decades, the Indian data centres industry is now emerging as the next attractive opportunity for investors and developers. The demand for data centres in India is being driven by the need for data storage given the Government’s Digital India and data localization policies, increased data consumption and 5G roll-out which is expected to enable adoption of data intensive technologies such as internet-of-things (IoT) and artificial intelligence (AI). The proliferation of data centres in India has also created growth opportunities in various sectors of the Indian economy, including real estate, manufacturing and renewable energy.
While the draft national data centre policy is yet to be implemented, various Indian states have adopted their respective state data centres policies to attract private investment in this capital and technology intensive sector. In this article, we compare the incentives offered under data centre policies adopted by certain Indian states which have received major investments in the data centre sector.

Green Buildings and Energy Efficiency: The India Story

Insights & Updates | March 22, 2023 | Practice Area: Banking and Finance, Clean Energy, Private Equity, Projects; Infrastructure and Energy, Regulatory

The global pivot on sustainable development has revitalized preferences among both occupiers and developers for certified green commercial buildings. Given emerging ESG trends, most MNCs looking to lease or set up offices in India are keen to occupy premises with green and/or sustainability ratings. This trend has created significant demand for commercial assets with energy-efficient ratings, which in turn has incentivized developers to upgrade and shift focus towards green buildings. Concomitantly, green financing may be on the rise, as domestic and offshore investors seek high-quality Grade A projects that are sustainable and ESG compliant. As part of their short-term ESG goals, listed developers may want to increase their green portfolio by the end of the decade, along with ramping up renewable energy deployment.
In this situation, it is useful to examine the cost of pursuing such green goals, given the existing housing demand in India in terms of both residential buildings and Grade A commercial/industrial assets. Emerging evidence suggests that green buildings are a higher-value, lower-risk asset than standard structures. Local developers are increasingly realizing that additional capital expenditure incurred upfront is likely to be offset by significant savings over the long term on operational costs.
The Energy Conservation (Amendment) Act, 2022 (“EC Amendment”) has included large residential buildings under its regulatory regime, along with enhancing the scope of the Energy Conservation Building Code (“ECBC”). Further, the EC Amendment has introduced the idea of sustainability, where a new building code related to energy conservation will provide norms for the use of renewable sources and green buildings. While the ECBC applies to a specified category of commercial buildings only, the new code will apply to office and residential buildings as well. Nevertheless, future digitalization may expand opportunities further. The diffusion of internet-connected devices in the residential and commercial sectors may allow added integration across demand and supply, such as by meeting India’s large-scale tri-generation requirements (cooling, heating, and power) through smart cities and district energy systems involving ‘cooling as a service’ (CaaS).

Being Cool: Investment Opportunities and Policy Imperatives to Combat Global Warming

Insights & Updates | February 21, 2023 | Practice Area: Clean Energy, Private Equity, Projects; Infrastructure and Energy, Regulatory

Recent studies find that a steady rise in temperature across India will significantly impact socioeconomic productivity and GDP growth. Importantly, heat-related stress produces corresponding cooling demands. In this regard, the World Bank recently identified opportunities for the India Cooling Action Plan (ICAP) to encourage private investment in key sectors, such as space cooling in buildings, cold chain and refrigeration, passenger transport air-conditioning, as well as refrigerants. Nevertheless, such investments may be constrained by the country’s international obligations, such as those in respect of HCFCs and HFCs. Besides, India’s climate mitigation strategy, including its thrust towards renewable energy and decarbonization, remains inadequate by itself. Emissions from short-lived climate pollutants (SLCPs) need to be addressed as well. Accordingly, strategic investments in innovative ventures, such as seaweed start-ups that focus on reducing agricultural methane, can be explored further. In addition, the waste and agricultural commodities sectors, along with their critical interface with technology, may be significantly scaled up in the next few years.

Liberalized Rules for Overseas Investment by Indian Entities: Laying the “Round Tripping” Ghost to Rest (or not just yet)

Insights & Updates | December 5, 2022 | Practice Area: General Corporate, Mergers and Acquisitions, Private Equity

Although the objectives of the erstwhile restriction on “round tripping” were laudable, such restriction had an unintended chilling effect on legitimate transactions. The new overseas investment regime introduced in August 2022 eases such restriction to a large extent. However, certain interpretational issues remain.

How Green is Your Money? Capitalizing on Indian Renewables

Insights & Updates | November 29, 2022 | Practice Area: Banking and Finance, Clean Energy, Mergers and Acquisitions, Private Equity, Projects; Infrastructure and Energy, Regulatory

Consistent with India’s ambitious climate-related targets, significant investments are being made in the domestic renewable energy sector, driven largely by private sector activity. Acquisitions and bonds represent a large portion of this capital, along with foreign equity, traditional loans, and mezzanine financing. Enabled by an encouraging FDI regime as well as locally-targeted regulatory schemes – such as incentives introduced by the government to bolster domestic capacity and manufacturing – self-sufficiency and foreign capital now constitute an integrated ecosystem. Along with conventional means of financing, newer frameworks such as infrastructure investment trusts specifically set up in the renewables space could be better explored in the future, especially in light of the urgency with which India needs to catch up towards its climate targets. Legislative changes in respect of the power markets – such as those related to trading in renewable energy certificates (RECs) – may also be curated by appropriate regulatory bodies to expand upon existing revenue streams.

Renewed Spotlight on Material Adverse Effect Clauses following Covid-19 and the Musk-Twitter Dispute

Insights & Updates | August 29, 2022 | Practice Area: General Corporate, Litigation and Arbitration, Mergers and Acquisitions, Private Equity

Material Adverse Effect (“MAE”) clauses are once again in focus with the recent Musk-Twitter dispute arising from the termination of the transaction related to the acquisition of Twitter on MAE grounds. This note discusses certain issues relating to MAE clauses from a practical perspective in an M&A setting and how these clauses have been interpreted by courts in the past.

Transactions involving IPL Franchises: Legal Due Diligence

Insights & Updates | July 29, 2022 | Practice Area: General Corporate, Mergers and Acquisitions, Private Equity, Regulatory

With the recent auction and sale of media rights of the Indian Premier League (“IPL”) by the Board of Control for Cricket in India (“BCCI”) for over INR 480 billion (approximately USD 6 billion), IPL franchises are in the spotlight. Reports suggest that certain IPL franchise owners may look to capitalize on an improved valuation, and either sell a part (or all) of their shareholding in the legal entity that has bid for and owns the IPL franchise, or may even consider a public listing of such legal entity. In this note, we look at key legal due diligence issues that may arise in connection with transactions involving IPL franchises.

Private Equity in Sports Franchises in India

Insights & Updates | March 24, 2022 | Practice Area: General Corporate, Mergers and Acquisitions, Private Equity, Regulatory

With the recent expansion of the IPL to include two new teams, CVC Capital Partners, a leading international private equity firm, acquired the Ahmedabad franchise – this is the first instance of a significant private equity investment in professional sports in India. We discuss the opportunities and potential challenges that lie ahead for private equity investment in sports franchises in the attached note.

Legal Considerations for Investments in Data Centres in India

Insights & Updates | March 16, 2022 | Practice Area: Data, Mergers and Acquisitions, Private Equity, Regulatory, Technology; Media and Telecommunications

With the continuing focus on digitisation accelerated by Covid lockdowns and rising demand for sustainability and green goals, there is an increase in activity relating to data centres for operators and investors as well as policymakers and regulators. In order to attract investment in data centres in India with a vision “to make India a global data centre hub”, the new Government policies intend to provide various incentives and exemptions to promote data centre industry growth. In the recent past, several multinational and domestic companies have set up data centres in India. Given the focus on data localization, there appears to be significant potential for growth for the data centres industry. In this background, the Government’s move to grant ‘infrastructure’ status to data centres and introduce a national data centre policy are welcome measures which will promote investments in data centres in India. In addition, two other policy initiatives announced in the budget speech which are expected to incentivize data centre investments are the 5G spectrum auction and the widening footprint of optical fibre.

PNB Housing Finance: The (Missing?) Registered Valuer Report

Insights & Updates | July 8, 2021 | Practice Area: Capital Markets, Corporate Governance and ESG, Mergers and Acquisitions, Private Equity

On June 15, we had written about a proposed preferential issue by PNB Housing Finance, in respect of which a proxy advisor issued a report asking public shareholders to vote against the proposed investment. As an alternative to a preferential issue, the report suggested that the company should have considered a “rights issue”. In our previous article, we considered a “rights issue” and a “preferential issue” from the perspective of certainty in funding, disclosure obligations, approvals and timelines and pricing.

The debate has since focused on whether the proposed preferential issue required a report of a registered valuer and whether such a report was in fact procured. In this article, we consider the legal framework around which the debate turns, comprising the SEBI ICDR Regulations, the Companies Act and PNB Housing Finance’s articles of association.