Key Points
Tax hurdles in share swap structures and court mergers hinder rescue transactions for start-ups..
To accelerate Viksit Bharat 2047, and encourage smaller domestic firms to invest and take risks, massive support is needed to scale up the judicial system including better facilities, training, research and compensation so that the infrastructure constraints of the legal system can be addressed..
Apart from improving the courts, and making judicial careers more attractive through market based means of compensation, funds should be directed to the National Law Schools and institutions of excellence such as OP Jindal..
Dealing with these challenges consumes hours of time during negotiation and often results in Indian managers and AIFs being excluded from the opportunity to participate in offshore financing rounds for India servicing start-ups..
There is an entire class of offshore investors, known as hybrid funds, who provide rescue financing to start-ups that have already raised capital through an instrument known as convertible notes..
