INR 52,568 Crore Spent in FY24 for Indian Corporate Legal Expenditure The top 50 companies by market capitalization accounted for a substantial portion of this increase, with their legal costs growing by 17.4 per cent to INR 21,389 crore

By Entrepreneur Staff

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Legal expenses for Indian corporations surged by 17 per cent in the financial year ending March 2024 (FY24), primarily driven by increased global deal activity, high dispute resolution costs and rising compliance expenses, according to a report from The Economic Times. The Nifty 500 companies reported a combined legal expenditure of INR 52,568 crore ($6.26 billion), a sharp rise from the INR 44,920 crore spent in FY23, as per data from ET Intelligence Group (ETIG).

The top 50 companies by market capitalization accounted for a substantial portion of this increase, with their legal costs growing by 17.4 per cent to INR 21,389 crore. Key factors behind the rising expenses include domestic and international expansion, higher regulatory fees and the substantial costs of litigation and arbitration.

The report quoted Nishith Dhruva, managing partner of law firm MDP & Legal, stating, "The cost of non-compliance has gone up significantly and hence most companies are trying to spend on compliance and other regulatory, which generally goes in the bucket of 'legal spend' for several listed companies. It's a sign of a maturing market and one may see this cost going up continuously."

Legal expenditures encompass a variety of costs, including litigation, arbitration, professional services, regulatory filings, fines and stamp duties. Leading corporate spenders in FY24 included Reliance Industries (INR 3,286 crore), Sun Pharmaceutical Industries (INR 2,953 crore), Infosys (INR 1,726 crore), Larsen & Toubro (INR 1,550 crore) and Samvardhana Motherson International (INR 1,287 crore).

Sector-wise, the top spenders were the infotech industry at INR 9,901 crore, followed by pharmaceuticals at INR 9,496 crore, finance at INR 5,110 crore, capital goods at INR 4,321 crore and oil & gas with INR 4,065 crore, as per the report.

Entrepreneur Staff

Entrepreneur Staff

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