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LegalPay partners with Jumbo Finance, a NBFC, to deploy funds in the super-secured insolvency financing

The Delhi based fintech start-up focuses on providing super-secured interim finance to distressed businesses through its investor networks, including NBFC channel partners. 

New Delhi, January 11, 2022:- LegalPay, India’s first and only tech-driven alternative-investments platform specializing in legal financing investments, has partnered with NBFC Jumbo Finance for secured interim financing. The company plans to have more such partnerships this year as an increasing number of companies are going under insolvency.

Under 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). LegalPay targets mid-market companies, including MSMEs undergoing insolvencies that have a requirement of INR 10 Lakhs – INR 5 Crores

LegalPay’s CEO and Founder Kundan Shahi said, “We are aggressively capturing the insolvency market and partnering with renowned NBFCs to deploy funds in insolvency markets and enjoy lucrative interest rates for short-term super-secured lending. It will provide investors with more opportunities to invest in distressed debt assets over the foreseeable shorter time horizon.”

India’s stressed asset market is estimated to be worth around $150 billion and will likely see an uptick in deal activity in FY 2022. 

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. 

“Investing in distressed debt assets is an interesting space for us as investors, and we look forward to our partnership with LegalPay to explore opportunities in the insolvency market /space,” said Smriti Ranka, Managing Director of Jumbo Finance.

LegalPay competes with restructuring giants such as Edelweiss, KKR, Eight Capital, which generally focus on high-ticket transactions within insolvency.