Growth Financing / Debt Syndication Advisory

Statutory framework relevant to growth financing and debt syndication:

1. Companies Act, 2013 — Section 180(1)(c): where a company's aggregate borrowings (including the proposed growth-financing facility) would exceed its paid-up share capital, free reserves, and securities premium account, the board cannot authorise the borrowing without a special resolution of shareholders; the resolution must additionally be filed with the Registrar of Companies in Form MGT-14 within 30 days.

2. SARFAESI Act, 2002 — governs secured lenders' enforcement recourse if a facility turns into a non-performing asset: Section 13(2) requires a 60-day demand notice to the borrower before enforcement; Section 13(4)(a)-(d) sets out the enforcement measures available thereafter (taking possession of secured assets, sale/lease/assignment, management takeover, or appointment of a manager); Section 14(1) allows the secured creditor to seek assistance of the Chief Metropolitan Magistrate/District Magistrate to take physical possession (as affirmed in Standard Chartered Bank v. Noble Kumar, (2013) 9 SCC 620).

3. Insolvency and Bankruptcy Code, 2016 — the backstop framework if a borrower defaults: Section 4(1) sets the minimum default threshold for initiating the Corporate Insolvency Resolution Process (CIRP) at ₹1 crore (per MCA notification S.O. 1205(E) dated 24 March 2020); Section 12(1) prescribes a 180-day CIRP timeline, extendable by 90 days under Section 12(2) (Committee of Creditors approval), subject to an outer limit of 330 days including litigation time under the proviso to Section 12(3), as introduced by the Insolvency and Bankruptcy Code (Amendment) Act, 2019 (effective 16 August 2019).

Understanding this recourse/restructuring framework informs facility structuring, covenant design, and security packages when arranging growth-stage debt financing.

We prepare lender-ready financial packs, information memoranda, projections, working capital assessment, and negotiation support. The engagement is suited for growth-stage businesses seeking bank, NBFC, SIDBI, or structured debt funding.