The Indian economy has been resilient despite global headwinds and recessionary factors in the western markets. Covid support and the Russia-Ukraine war have triggered inflationary pressures in Europe and the US. India is also witnessing an interest rate upcycle. Interestingly, despite the challenging global macro-economic environment, M&A activity in India has remained strong with interest from global as well as domestic players. We, at Dhruva are delighted to inform you that we acted as tax advisors on several transactions during the last few months. A snapshot of some of these transactions is given below for your reference:
Acquisition of majority stake in Sahyadri Hospital Private Limited ("SHPL") by Ontario Teachers’ Pension Plan (“OTPP”)
OTPP, a global investor with net assets of $242.5 billion as on June 30, 2022, acquired a majority stake in SHPL, one of the largest private hospital chain in the state of Maharashtra, from the Everstone Group.
SHPL has 8 hospitals with a capacity of 900 operating beds and 300 critical-care beds. With 2,000 clinicians along with 2,600 supporting staff across its network of hospitals, Sahyadri’s facilities are concentrated around the city of Pune, which is the second largest city in Maharashtra by population.
By acquiring a majority stake in SHPL, OTPP plans to leverage their significant global experience in the healthcare sector to help scale the Company into a national healthcare provider in the coming years.
Dhruva Advisors acted as the tax diligence and structuring advisors to OTPP on certain tax related aspects of the transaction structure and documentation.
Investment of INR 177 Crores by Premji Invest Opportunity Fund (“Premji Invest”) in Comfort Grid Technologies Private Limited (“Comfort Grid”)
Comfort Grid is engaged in the business of manufacturing and selling mattresses and other Comfort products. The Company is an e-commerce company selling its products through online channel under its brand “The Sleep Company”.
The Sleep Company received a Series B funding of INR 177 Crores from Premji Invest. The round also saw participation from the start-up's existing investor Fireside Ventures and Alteria Capital, among others.
The Company plans to utilize the fresh funds to expand its offline presence and grow its omni-channel brand strategy.
Dhruva Advisors acted as the tax diligence advisors to Premji Invest on the transaction.
Merger of JSW Ispat Special Products Limited (“JSW Ispat”) and Creixent Special Steels Limited (“Creixent”) with JSW Steel Limited (“JSW Steel”)
Board of Directors of JSW Steel, JSW Ispat and Creixent approved the merger of JSW Ispat and Creixent with JSW Steel. The merger would help consolidate the business of JSW Ispat (a company acquired in FY 2018-19 under the IBC process) and Creixent into JSW Steel. JSW Ispat is one of the first examples of a successful turnaround through IBC process.
The merger is being implemented through an NCLT approved scheme of amalgamation.
JSW Steel is India’s largest steel exporter and leading producer of integrated, value added and high-grade steel, with manufacturing capacity of ~26 MTPA in India. JSW Ispat is a special steel products manufacturer with manufacturing capacity of 1.2 MTPA. Creixent is a joint venture between JSW Steel and AION Investments Private II Limited, engaged in the business of trading in steel and steel products and holding investments. Creixent acquired controlling stake of JSW Ispat in August 2018.
Dhruva Advisors acted as the tax and structuring advisors to JSW Steel, JSW Ispat and Creixent on the transaction.
Acquisition of stake in Moonfrog Labs Private Limited (“Moonfrog”) by Stillfront Group AB (“Stillfront”), a Swedish company listed on Nasdaq
Stillfront acquired a further stake in Moonfrog for ~USD 16.46 million via a secondary transaction. Post this acquisition, Stillfront’s stake in Moonfrog increased to 94%. The balance stake is agreed to be acquired over the next two years.
Moonfrog is engaged in the business of developing, marketing and operating games and gaming infrastructure.
Stillfront is a free-to-play powerhouse of gaming studios.
Dhruva Advisors acted as the tax and structuring advisors to Moonfrog and the selling shareholders.
Sale of Enterprise Mobility Business by Mahindra Logistics Limited to its wholly owned subsidiary
The board of directors of Mahindra Logistics Limited (MLL) granted approval for entering into a business transfer agreement for sale of its Enterprise Mobility Business to its wholly owned subsidiary, MLL Mobility Private Limited (MMPL), on slump exchange basis, effective October 1, 2022, for a lump sum consideration of INR 36.12 Crores to be discharged by MMPL through issuance of equity shares to MLL.
Dhruva Advisors acted as the tax and regulatory advisors to MLL.
Proposed indirect acquisition of 29.18% stake in New Delhi Television Limited (“NDTV”) by affiliate of Adani Enterprise Limited (“AEL”)
Wholly owned subsidiary of AEL i.e. AMG Media Networks Limited (“AMNL”) acquired 100% equity shares of Vishvapradhan Commercial Private Limited (“VCPL”) which held share warrants of RRPR Holding Private Limited (“RRPR”). VCPL is entitled to exercise its rights to convert share warrants of RRPR which would entitle VCPL to hold at-least 99.50% equity stake in RRPR. RRPR holds 29.18% stake in NDTV. NDTV is a listed company engaged in the business of television media and operates three channels including a dual channel (NDTV 24x7, NDTV India and NDTV Profit).
Dhruva Advisors acted as the tax advisors to AEL providing need-based support in connection with structuring the proposed acquisition.
Acquisition of 100% stake of Support Properties Private Limited ("SPPL") and Eternus Real Estate Private Limited ("EREPL") by Adani Power Limited (“APL”)
APL acquired 100% equity stake in SPPL and EREPL. The acquisition cumulatively amounted to approximately INR 609.4 Crores.
APL is India’s largest private thermal power producer and an important part of diversified Adani Group. SPPL and EREPL are incorporated with an object for carrying out the business in infrastructural activities. By acquiring these two companies, APL plans to set up infrastructural facilities.
Dhruva Advisors acted as the tax advisors to APL providing structuring advice and implications in connection with specific aspects of the acquisition of SPPL and EREPL.
Adani Group to acquire Macquarie Asia Infrastructure Fund’s India Toll Roads in Andhra Pradesh and Gujarat for INR 3,110 Crores
Adani Road Transport Ltd (“ART”’), a 100% subsidiary of Adani Enterprises Ltd (“AEL”), will acquire 56.8% stake in Gujarat toll roads portfolio (“GRICL”) and 100% stake in Andhra Pradesh toll roads portfolio (“STPL”).
GRICL and STPL collectively have portfolio of 972-km lane, long concession life with established traffic in strategically located and important traffic corridors in western and southern India.
Dhruva Advisors acted as the tax advisors to Adani Group on specific aspects of the acquisition structure.