Income Tax Return Form
India Negotiated M&A Guide
Corporate and M&A Law Committee
Contact
H. Jayesh Juris Corp Mumbai, India h_jayesh@jclex.com
50767302.2
CHAPTER I INTRODUCTION Historically, the foreign investment policy of the Indian government (during the period from 1950 to 1990) consisted of stringent foreign exchange controls and regulations (including in the form of industrial licensing, quota system, capital controls), a bar on free trade and control of the flow of funds to a very large extent. As early as 1984, India saw the failure of a takeover attempt of Escorts Limited and DCM by Swaraj Paul’s Caparo Group, owing to the promoters using political clout against the uninvited acquirer. However, 1991 witnessed a significant transformation and shift in the government policy with the introduction of the New Industrial Policy, 1991 which paved the way for economic liberalization in India. The government relaxed various controls and regulations allowing trade and commerce to flourish, resulting in a robust and progressive economy. It was then that India saw the emergence of new sectors such as information technology, telecom, and the rapid growth of service sectors like hospitality, banking, retail and entertainment. All of which led to the growth of the Indian financial system. Deregulation of industries coupled with participation from foreign investors marked the beginning of the era of large scale mergers and acquisitions (M&A) in India. Recent notable deals such as Vodafone-Hutchison Essar, Tata-Corus and Hindalco-Novelis have put India in the centre stage of global M&A activity. Outbound investments by Indian companies have grown manifold in diverse sectors ranging from oil & gas, steel, energy to telecommunications and pharmaceuticals. While this Guide is not intended at enumerating figures on the M&A front, it would not be incorrect to say that India Inc. has, in fact, arrived. The primary regulators governing M&A activity in India are the Securities and Exchange
Corporate and M&A Law Committee
Contact
H. Jayesh Juris Corp Mumbai, India h_jayesh@jclex.com
50767302.2
CHAPTER I INTRODUCTION Historically, the foreign investment policy of the Indian government (during the period from 1950 to 1990) consisted of stringent foreign exchange controls and regulations (including in the form of industrial licensing, quota system, capital controls), a bar on free trade and control of the flow of funds to a very large extent. As early as 1984, India saw the failure of a takeover attempt of Escorts Limited and DCM by Swaraj Paul’s Caparo Group, owing to the promoters using political clout against the uninvited acquirer. However, 1991 witnessed a significant transformation and shift in the government policy with the introduction of the New Industrial Policy, 1991 which paved the way for economic liberalization in India. The government relaxed various controls and regulations allowing trade and commerce to flourish, resulting in a robust and progressive economy. It was then that India saw the emergence of new sectors such as information technology, telecom, and the rapid growth of service sectors like hospitality, banking, retail and entertainment. All of which led to the growth of the Indian financial system. Deregulation of industries coupled with participation from foreign investors marked the beginning of the era of large scale mergers and acquisitions (M&A) in India. Recent notable deals such as Vodafone-Hutchison Essar, Tata-Corus and Hindalco-Novelis have put India in the centre stage of global M&A activity. Outbound investments by Indian companies have grown manifold in diverse sectors ranging from oil & gas, steel, energy to telecommunications and pharmaceuticals. While this Guide is not intended at enumerating figures on the M&A front, it would not be incorrect to say that India Inc. has, in fact, arrived. The primary regulators governing M&A activity in India are the Securities and Exchange