INDIA Trends and Developments Contributed by: Tejesh Chitlangi, Sushreet Pattanayak, Pooja Mehta and Anita Jain, IC Universal Legal
norms. Additionally, the newly introduced IFS - CA (Listing) Regulations, 2024, which allow the direct listing of securities and financial products on IFSC stock exchanges, should further boost GIFT City’s attractiveness for capital raising. Additionally, the IFSCA has recently approved amendments to the IFSCA (Fund Management) Regulations, 2022. These approvals include reduction in the minimum corpus amount of the scheme for both non-retail and retail schemes. Further, the contribution from the fund manage - ment entity/its associates to the corpus of a non- retail scheme, presently restricted at 10%, will now be permitted up to 100%. The proposed changes also intend to liberalise regulatory requirements with respect to the number and change of key managerial personnel, valuation of fund-of-funds schemes and validity of the tenure of the private placement memorandum, among other modifications. Market Trends Some of the key market trends observed over The Indian private credit market has seen explo - sive growth, driven by a significant credit gap for Small and Medium Enterprises (SMEs) that are under-served by traditional banks. This gap, coupled with the allure of higher potential returns compared to traditional fixed-income invest - ments, has attracted significant investor inter - est. Furthermore, private credit offers attractive diversification benefits for investors seeking to reduce their reliance on traditional asset classes like equities and bonds. This demand has spurred the emergence of diverse private credit funds, including those the last year are as follows. Rise of private credit funds
specialising in structured credit and special situ - ations. Secondaries/buyout funds The Indian secondaries and buyout market has also seen robust growth, underpinned by the maturing private equity ecosystem. A consist - ent increase in the number and size of private equity investments has been observed in the Indian market, creating a larger pool of potential buyout and secondary targets. This maturing ecosystem has also led to a grow - ing need for liquidity. Many private equity inves - tors are seeking liquidity for their existing invest - ments, creating a robust market for secondary transactions. Secondary transactions appear to serve as a means for investors to realise returns and rebalance their portfolios. Furthermore, buyout funds are actively pursuing consolidation opportunities within various sec - tors, driving industry consolidation. Conclusion The AIF industry in India has made significant strides in investor protection and regulatory transparency in recent years. These advances have created an environment that aligns with international best practices, boosting confi - dence among both domestic and global inves - tors. This robust regulatory framework, coupled with the rise of GIFT City as a prominent interna - tional financial hub, positions India as an attrac - tive destination for international capital flows. Concurrently, the evolution of the retail funds segment, with innovations such as MF Lite and a focus on investor education, is broadening access to investment opportunities for a wider segment of the population.
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