By Shriram Subramanian
India’s emergence as a globally competitive capital market depends on the speed and efficiency with which corporate transactions are completed. While the country continues to see complex transactions and significant capital inflows from first-time investors—both strategic and financial—the pace at which our legal and regulatory system operates needs to be hastened. The slow completion of transactions is becoming the single biggest obstacle preventing India’s capital markets from realising their true potential.
Significant delays in approvals from the Securities and Exchange Board of India (Sebi), National Company Law Tribunal (NCLT), Reserve Bank of India (RBI), and the courts for mergers, demergers, acquisitions, or restructurings erode the financial logic behind transactions and undermine investor trust in market institutions. While investors can assess the overall risk and price it in the transactions, they cannot wait indefinitely for resolutions. In an era when capital moves across borders at a click of a button, prolonged legal or regulatory processes act as a costly drag on ambition and growth.
Delays and their overall impact
India’s corporate law and regulatory system paint a mixed picture where the approval process has changed over the decade but the speed of approvals remains slow. The case backlog is increasing and the ecosystem has many examples of transactions that have stretched far beyond reasonable timelines.
For instance, JSW Steel’s acquisition of Bhushan Steel and Power through the Insolvency and Bankruptcy Code route survived five years of procedural complexity before finally securing legal finality this year. That is half a decade in which an acquirer invested capital and waited, creditors watched, and the market questioned whether India rewards resolution or inertia.
Another example is Sarda Energy & Minerals’ acquisition of SKS Power through the insolvency process. The company swiftly worked towards the post-transaction integration after securing legal approvals. It showed that when decisions are synchronised and upheld with conviction, assets can be revived rather than written off. However, third-party litigation continues, giving another example of how unwanted litigation blunts reform. The approvals for IHH’s open offer for a stake in Fortis Healthcare went into a tailspin as it got stuck between Sebi and court judgments, finally getting Sebi approval this year.
Recently, there have been a slew of announcements in the banking and non-banking financial company sectors, where strategic and financial investors are acquiring significant shareholdings in listed entities. One hopes that the Sebi, RBI, and NCLT approvals are quick so that transactions are completed quicker.
The number of investors, entrepreneurs, companies, and transactions has exploded, leading to a record number of initial public offerings, high domestic participation, and strong foreign capital inflows. The paradox is that these same market participants often face unpredictable timelines once transactions enter the realm of regulatory approvals or litigation.
Pending mergers and demergers, contested insolvency cases, and unresolved open offers all point to a deeper structural gap—the absence of time-bound decision-making across institutions. When timelines stretch indefinitely, it not only delays outcomes but also blurs accountability. No one is explicitly responsible for lost months or years, yet the cost is borne collectively by investors, creditors, and the economy.
Signs of progress
Encouragingly, the past year has seen a marked change in regulatory intent. Recent examples include Sebi’s approvals for the Burman family’s open offer for Religare Enterprises and IHH Healthcare’s open offer for Fortis Hospitals, reflecting a decisive approach. Both matters had been delayed due to certain issues, but the eventual decisions reflect that the capital market regulator is increasingly conscious of the economic impact of delay. Sebi’s clearance of these long-pending matters sends a message that predictability and finality are now recognised as policy imperatives.
What needs to change?
India’s capital markets require a systemic commitment to timeliness, which needs to be institutionalised through harmonised timelines across regulators, courts, and tribunals as well as the utilisation of technology. This does not mean sacrificing due process. It means treating time itself as a regulated variable, subject to disclosure, monitoring, and accountability.
For India to remain attractive, its legal and regulatory framework must evolve at a speed that reflects realities of modern capital flows and business environment. In an age when capital markets themselves are becoming the transmission mechanism for economic policy, the cost of delay is no longer measured only in lost deals. Still, it affects the broader perception of India’s ease of doing business.
India’s market participation will sustain only if legal and regulatory outcomes move in step with financial innovation. The next phase of reform is not about drafting new laws but enforcing existing ones with pace and precision, where predictable timelines and decisive closures become the true enablers of long-term capital formation.
Ultimately, markets thrive on trust, and trust is built on the assurance that outcomes will arrive on time. As India’s capital markets rise to global prominence, the ability of its institutions to deliver swift, coordinated, and decisive actions will determine whether the current exuberance matures into a durable one or fades under the weight of its own delays.
Shriram Subramanian is the founder and MD of InGovern Research Services
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