Growth of Unlisted InvITs - Regulatory and Tax Issues in Asset Monetization

Wednesday, April 29, 2020

SESSION: 03:00 PM – 04:00 PM (IST)

INTRODUCTION

Given the lockdown and the overall slump in the economy, the Indian government has clearly indicated that certain key sectors will be given the required impetus to revitalize the economy. Infrastructure is undoubtedly the top most in this list – given the sector’s ability to generate large scale employment, help restart the lending machinery for large financial institutions, and augment the supply side revenues instantly. However, the infrastructure sector is in dire need of patient capital and to address this, the government’s messaging to long term foreign investors has also been crystal clear – unlisted InvITs will have the same tax benefits as listed InvITs, complete tax break for notified foreign sovereigns and pension funds investing in the infrastructure sector, and several operational and fund-raising challenges faced by InvITs being relaxed/ addressed.

The Indian government’s intent is manifest – to promote InvITs as a strategic M&A product in order to propel the infrastructure sector. In the same vein, InvITs as an asset class have garnered tremendous traction amongst foreign investors, since they provide access to a cache of yielding assets in a tax optimized and well-regulated manner.

We invite you to join a high-profile webinar to discuss the strategic perspective behind emergence of unlisted InvITs, legal and tax considerations involved in setting up of InvITs, and the key operational challenges encountered by InvITs.

 

Focus Areas

  • Broad overview of the InvIT framework, and benefits to stakeholders

  • InvITs as strategic M&A product – Emergence of unlisted InvITs

  • CoVID impact on infrastructure sector - compensation for lockdown, extension of financial closure timelines, and constraints around interim capital raising

  • InvIT fund-raising challenges

  • Direct investment into InvITs vs. Investment into Offshore Sponsor Holding Companies

  • Transition to InvIT – Key structures and attendant implications

  • Taxation of InvITs - Listed vs. Unlisted InvITs – harmonization of tax benefits

  • Abolishment of traditional dividend tax regime and corresponding impact on unitholders of InvIT, and constraints around claiming tax treaty benefit

  • Tax benefits for notified sovereign funds / pension funds in InvITs / eligible infrastructure assets and related issues

  • Operational challenges for InVITs

Speakers

RUCHIR SINHA

Leader, Corporate Transactions Group

Nishith Desai Associates

Ruchir leads the Corporate Transactions Group in the firm, and as part of it leads the Private Equity, M&A and Structured Finance Practices at the firm. He focuses on financial services, infrastructure, technology and real estate industries. He advises extensively on PIPE deals, take private transactions, cross border tax, developing tax optimal instruments and merger control (antitrust) issues. With background in fund formation, he has also advised leading global sponsors, sovereign funds and LPs on setting up of offshore and domestic funds and investment platforms, from a legal and cross border tax perspective. He has advised both sponsors and investors on setting-up of and investments in, multiple InvITs, listed and unlisted. Ruchir was involved in the drafting and development of the REIT Regulations, and has extensively worked through industry bodies to ensure a policy framework conducive to growth of REITs and InvITs. Nominated as one of the top 3 corporate lawyers in the country under 35 by IDEX and the ‘Dealmaker of the Year’ by the Asian Legal Business (Indian Law Awards), several of his transactions have been nominated as ‘most innovative’ by Financial Times, London.

 

SHREYAS BHUSHAN

Senior Member, M&A and PE Practice

Nishith Desai Associates

Shreyas is a senior member of the M&A and PE practice at Nishith Desai Associates. His practice entails structuring, negotiating and advising on cross border investments from a legal, strategic and regulatory perspective. Shreyas specializes in public transactions (PE and M&A), and has advised some of the leading global sponsors and corporate houses on PIPE transactions, public tender offers, take-private transactions and corporate governance issues. He has advised investors and sponsors on transactions involving setting-up of and investments in InvITs (listed and unlisted). He has also worked on a variety of matters such as asset transfers, structured finance transactions, inversions and mergers/ restructurings. From an industry perspective, Shreyas mainly focusses on transactions in the financial services, technology, infrastructure and real estate verticals. He interacts with regulators on policy advocacy issues, and has provided formal recommendations on foreign exchange and securities law matters.

 

HARDIK SHAH

Director

KKR

Hardik Shah joined KKR in 2018 and is a member of the Asia-Pacific Infrastructure team. Hardik is responsible for Infrastructure investments in India. He began his career at Macquarie Group in Sydney where he spent over 10 years across their Sydney and Mumbai offices and was involved in building their India Infrastructure business. More recently, Hardik led Brookfield’s India business in India and was responsible for building Brookfield’s team and presence. Hardik has led ~USD4bn of transactions in India across various infrastructure sectors such as Telecom Towers, Toll Roads, Airports, Energy transportation and Renewable Energy.

 

Anish Sanghvi

Partner, Tax & Regulatory Services,

PwC

Anish is a Partner in PwC’s Tax & Regulatory team and has over 20 years’ experience working with international consulting firms. Anish advises MNC and domestic clients on Indian and international tax, inbound investment advisory and corporate tax (with a focus on real estate, infrastructure and Private Equity funds). He is also been actively involved in advising private equity and venture capital fund clients on structuring their pooling vehicles, including conducting jurisdiction analyses and structuring and reviewing documents.

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APREA is a non-profit society that represents the property investment industry across AsiaPac. Our members include prominent pension, insurance and sovereign wealth funds, investment managers, family office platforms, developers, professional firms and thought leaders. APREA’s focus is cross-border investment and engages closely with governments to help open-up and expand property investment markets by working with governments to improve business ground rules.At present, APREA hosts chapters in China, Japan, India, Australia, Malaysia, Singapore, Hong Kong and the Philippines.