INDIA 2009

Source: ALB Legal News

The business traveller to India is confronted with a situation not unlike that seen in other parts of Asia. Rather run-down neighbourhoods that are fast encroaching on the city centres in Mumbai, Delhi, Chennai and Bangalore; dilapidated roads and public infrastructure and inexplicable blackouts that strike with clockwork regularity every hour, in even the most upscale of buildings.

But even in the midst of the pollution and poverty the average business-person will see a few things in India that one is unlikely to encounter elsewhere in the region. Take the drive from Mumbai’s Chhatrapati Shivaji International Airport to the city’s central business district hub at Nariman Point, or journey down one of Delhi’s national highways from Indira Gandhi Airport to Connaught Place. You will encounter plenty of billboards featuring celebrities, sport stars and business leaders hocking everything from soda to cement – perhaps not so out of the ordinary.

Somewhat less common is that scattered among them are posters advertising capital raisings, IPOs, and bond and share issuances. One such issuance, L&T, just raised US$600m through a dual QIP/CB issue and another – Welspun – increased its CB by US$150m. This is a strong signifier that both the corporate sector and the middle class’s thirst for capital, and the ‘India story’ — that narrative started by traders along the Silk Road some thousand years ago – is quickly reaching its final stanza.

Billions of dollars have already been spent by both public and private investors over the last two years (estimated between US$4–US$5.1trn), yet this is set to be exceeded by a government elected on a mandate to improve vital infrastructure. Targeted spending of US$10trn over five years, a corporate sector with the means available to construct it and a fast-emerging class of wealth generators with the eagerness and risk appetite to invest all assist.

Infrastructure is only part of the story, albeit a big part. Outbound investment remains on the radar of cash-rich Indian corporates like Tata, ICICI and Reliance, as well as a whole host of smaller ones. FDI guidelines have been relaxed to encourage foreign investment and the innovation seen on the nation’s capital markets has played a hand in leading an unmistakable recovery over the past three months.

Just as the vital signs for the Indian economy are good, so too are those of the nation’s law firms, who have themselves long hedged their own domestic and international growth against the rising stocks of India’s economy. Never have so many law firms – and so many from different segments of the market – been involved.

It’s now not only names like Amarchand & Mangaldas, AZB and J Sagar & Associates that one is likely to encounter on the opposite side of the boardroom table. Mid-tier and boutique law firms are claiming headlines of their own for their counsel on the largest, most innovative and complex of Indian and international transactions – and often without the assistance of international law firms. The legal services market continues to stride towards a level of sophistication that many outside India contend (rightly or wrongly) is beyond expectations.

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