LegalPay partners with Jumbo Finance to fund small ticket CIRP cases

Legal technology startup LegalPay has partnered with Mumbai-based non-banking finance firm Ltd to give interim finance to the companies undergoing the Corporate Insolvency Resolution Process (CIRP).

New Delhi-based LegalPay, which also works as an alternative-investments platform specializing in legal financing, is also in talks with some more such NBFCs to fund companies under CIRP. The firm is targeting mid-market companies, including micro-small and medium enterprises (MSMEs), undergoing insolvencies requiring up to Rs 5 crore.

Under the Insolvency & Bankruptcy Code (IBC) 2016, interim financing is a short-term super-secure loan that allows an insolvent company to remain operational while undergoing a Corporate Insolvency Resolution Process (CIRP).

“This will provide investors with more opportunities to invest in distressed debt assets over the foreseeable shorter time horizon,” said Kundan Sahi, founder of LegalPay.

According to the recent RBI financial stability report, the gross non-NPA ratio will likely increase from 7.48% in March 2021 to 9.80 % – 11.22 % in March 2022.

As per the latest report by the Insolvency & Bankruptcy Board of India (IBBI), since the inception of the IBC, a total of 4708 CIRPs have commenced by the end of September 2021. Out of these companies, 421 completed approval of the resolution plan.

“Investing in distressed debt assets is an interesting space for us as investors, and we look forward to our partnership with LegalPay to…

Read more…