Third-party litigation funding startup LegalPay has acquired a strategic minority stake in the Gujarat-based non-banking finance company (NBFC) Padmalaya Finserve.
The NBFC plans to disburse about Rs 1,000 crore in loans towards legal expenses for the litigation as well as the interim finance to the companies, undergoing the Corporate Insolvency Resolution Process (CIRP).
Padmalaya Finserve is owned by Goldi Solar, a Surat-based solar manufacturing business house backed by the diamantaire Dholakiya family-promoted SRK Group.
“This strategic equity acquisition in Padmalaya will help us go a long way in increasing our footprint in the legal, financial space,” said Kundan Shahi, chief executive of LegalPay, in a release. “This will help us bring more innovative products catering to the legal expense market.”
Founded in 2020, LegalPay is the country’s first litigation funding platform. It provides embedded financing in the legal and insolvency market.
“This is a one-of-a-kind partnership with the vision of revolutionizing transactions in the legal and insolvency industry,” said Ishver Dholakiya, founder of Goldi Solar. “LegalPay as a partner brings their sector expertise and robust tech infrastructure necessary for establishing a strong dominance in the sector.”
Surat-based Goldi Solar is a manufacturer of solar panels and provides EPC services.
As per the latest data from the Insolvency & Bankruptcy Board of India (IBBI), 5,893 companies were admitted under the CIRP till September-end this year. Of these, 3,946 have been closed. Also, the data suggests that of the CIRP closed, the corporate debtor companies were rescued in 2,139 cases.