Exposure quantified, not listed
A finding with a number attached moves the price. A finding described as a concern does not. We quantify wherever the record allows it and say plainly when it does not.
Advisory & Transactions
Transaction Advisory Services
Buy-side and sell-side transaction support for Indian companies, covering financial and tax due diligence, deal structuring under the Companies Act and FEMA, and completion mechanics that survive signing.
A transaction fails on the things nobody checked. An earnings figure that flattered two quarters, an input tax credit time-barred before you looked at it, a shareholders’ agreement that hands away a consent right the buyer assumed it had bought.
Overview
You have signed a term sheet, or you are close to it. The lawyers are drafting and the timetable has its own momentum. What is still unknown is whether the earnings you are pricing repeat next year, whether the target has an indirect tax position it has not provisioned, and whether the structure agreed in principle survives contact with the Income-tax Act and the FEMA pricing rules.
Transaction advisory closes that gap while it is still a negotiating point rather than an indemnity claim. We work on both sides. Acquirers use us to test what they are buying. Sellers use us to find the problems first, on their own timetable, instead of having a buyer find them during exclusivity. The work is evidentiary throughout: management assertions are reconciled to filed returns, ledgers, bank statements and registry records, and the report says what the evidence supports.
Scope of engagement
- Quality of earnings: normalised EBITDA bridge, one-off and owner-related adjustments, revenue cut-off and recognition tested against Ind AS 115 or AS 9 as applicable, customer concentration and churn.
- Working capital and net debt: monthly trend against the seller’s proposed target, peak-to-trough movement, ageing of receivables and payables, debt-like items including unfunded gratuity, disputed statutory dues and capex creditors.
- Direct tax review: assessment and appeal status by year, demands outstanding and stayed, TDS default and short-deduction positions on TRACES, Section 43B and Section 40(a)(ia) disallowance risk, MAT credit and brought-forward loss position.
- Indirect tax review: GSTR-1 to GSTR-3B to books reconciliation, GSTR-2B input tax credit matching, credits time-barred under Section 16(4), reverse charge exposure, refund claims and their ageing, e-invoicing and e-way bill compliance.
- Secretarial and registry review: statutory registers, charge search on MCA21 covering Form CHG-1 and CHG-4, Section 185 and Section 186 compliance, Section 188 related party approvals, and the procedural trail behind every allotment under Section 42 and Section 62.
- FEMA review: entry route and sectoral cap, Form FC-GPR and FC-TRS filings on FIRMS, downstream investment reporting, and any late submission fee exposure.
- Structuring analysis: share purchase against asset purchase against slump sale, Section 2(1B) amalgamation conditions, Section 47 exemptions, Section 72A loss carry-forward, the Section 79 shareholding continuity test, and the effect of Section 50CA and Section 56(2)(x) on the consideration agreed.
- Merger control screening under Sections 5 and 6 of the Competition Act 2002, including the deal value threshold introduced by the 2023 amendment and Green Channel eligibility.
Deliverables
- A red flag memorandum at the midpoint, listing each finding, the exposure quantified where quantification is possible, and whether the issue belongs in the price, in an indemnity, in a condition precedent, or in a decision not to proceed.
- A full due diligence report, with each finding traced to the document that supports it.
- A databook in spreadsheet form: mapped trial balances, monthly profit and loss, working capital bridge, net debt schedule and the tax exposure roll-forward.
- Draft definitions for the completion accounts schedule: net debt, working capital target, and the accounting policies that will govern the closing statement.
- A closing checklist covering Form PAS-3, FC-GPR or FC-TRS, charge filings, board and shareholder resolutions, and a Section 281 certificate where the target has outstanding demands.
Process
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Scoping and access
A call to fix entities, periods, materiality and the questions you actually need answered. We issue the information request list, agree the Q&A protocol with the counterparty, and confirm data room access. Two to three business days.
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Evidence gathering
Documents are collected, indexed and reconciled. Returns are pulled from the portals rather than accepted as PDFs from the seller. Gaps are logged and chased in a single running list rather than in scattered emails.
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Red flag report
Issued once enough evidence exists to change your negotiating position, typically at the halfway point. Delivered with a working call so you can act on it before the full report lands.
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Full report and structuring note
Findings written up in final form, exposures quantified, structure compared. Management responses are recorded against each finding, including where they disagree with us.
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Negotiation and closing support
We support the price adjustment argument, the completion accounts definitions and the conditions precedent list, and we review the closing statement when it is prepared.
Benefits
The route decided before drafting starts
Choosing between a share deal and a slump sale after the documents are drafted is expensive. The structuring note lands while the choice is still open.
Control of the disclosure timetable
Vendor diligence puts the difficult items in your own report, disclosed on your schedule, instead of in a buyer’s red flag memo during exclusivity.
Industries served
Deal risk is sector-specific, and the diligence programme is weighted accordingly. In manufacturing, the work concentrates on inventory valuation, capital goods input tax credit and environmental consents attaching to the site. In technology and software, it concentrates on revenue recognition across multi-year contracts, deferred revenue carried at closing, ESOP obligations and the treatment of overseas subsidiaries. In healthcare, on establishment licensing, clinical staffing contracts and the GST position on composite supplies. In financial services, on regulatory capital, asset classification and the change-in-control approval path.
Typical timeline
| Stage | Elapsed time |
|---|---|
| Scoping call to information request list issued | 2-3 business days |
| Evidence gathering and reconciliation | 2-3 weeks |
| Red flag memorandum | Week 3 |
| Full report, databook and structuring note | Week 5-7 |
| Negotiation and closing support | Runs to completion |
A single-entity domestic target with clean records completes toward the shorter end. Multiple entities, an overseas arm, or a data room that arrives in instalments moves it toward the longer end.
Engagement model
Engagements are contracted on a fixed fee for a defined scope, quoted after the scoping call and confirmed in an engagement letter that names the entities, the periods and the exclusions. Where scope changes mid-engagement, a written variation is issued before the additional work begins.
Delivery is virtual. Documents are exchanged through your data room or a controlled folder we set up for the engagement, not through email attachments. You get a named contact, a weekly written status, and a working call at each milestone.
What is not included
These sit outside the engagement unless separately scoped and agreed in writing.
- Statutory audit, review or any assurance opinion on the target’s financial statements. Due diligence is not an audit and the report carries no audit opinion.
- Legal opinions and the drafting of transaction documents. We supply financial and tax content to your counsel; the share purchase agreement, shareholders’ agreement and disclosure letter are theirs to draft.
- A valuation report or fairness opinion. Valuation is a separate engagement.
- Title investigation of immovable property, and any search of land records, encumbrance certificates or leasehold documentation.
- Technical, engineering, environmental or IT security due diligence, and any physical inspection of plant, stock or premises.
- Filing before the Competition Commission of India, the NCLT or any regulator, and appearance as an authorised representative in any proceeding.
- Forensic investigation. If diligence surfaces indicators of fraud, we report them and stop; extending into an investigation requires a fresh mandate.
Findings are limited to the periods and entities in the engagement letter. Anything outside those boundaries has not been examined.
Bring the term sheet and the timetable to a scoping call. Scope, fee and dates are agreed before any data changes hands.
Frequently asked questions
Both, on separate mandates. Buy-side work tests what is being acquired and feeds the price and indemnity position. Sell-side work runs the same procedures before the market sees the company, so that the issues a buyer would raise are fixed, provisioned or disclosed on your terms. We run a conflict check before accepting either mandate and will decline where we already hold information on the counterparty.
Materiality is agreed in writing during scoping, usually as a percentage of the target's revenue or normalised EBITDA, with a lower separate threshold for tax and regulatory findings because those carry interest and penalty regardless of size. Items below threshold are still logged in the databook. They are simply not written up as findings unless they show a pattern.
Yes. Most companies in the mid-market report under Accounting Standards rather than Ind AS. We work from the trial balance, the GST and TDS returns, bank statements and the statutory registers rather than relying on the framework label. Where a buyer will consolidate under Ind AS, we flag the differences that will change reported earnings after acquisition, such as lease accounting and expected credit loss.
No. Due diligence tests the inputs a valuation relies on, which is a different exercise from producing an opinion of value. If you need a valuation report for Section 62(1)(c), the FEMA pricing guidelines or a Section 56(2)(x) position, that is a separate engagement under our Business Valuation Services. Work requiring a registered signatory is performed and signed by a professional holding the relevant registration.
A signed engagement letter, a non-disclosure agreement covering the target's data, and either data room access or a named contact at the target who can respond to the information request list. We issue the request list within two business days of scoping. Delay in that list being answered is the single largest cause of a diligence timetable slipping.
Yes, where you authorise it in the engagement letter. We routinely work alongside transaction counsel on the disclosure letter, the warranty set and the completion accounts schedule, and with lenders on the conditions precedent list. We do not give legal opinions or draft transaction documents. We provide the financial and tax content your advisers put into them.
The fee is for the work performed, not the outcome, so a completed report is billable whether or not the transaction closes. If you abort mid-engagement, we bill the stages delivered and issue whatever findings exist at that point in writing. Our refund and cancellation terms apply and are published on the site before purchase.
Related services
Business Valuation Services
Valuation reports for Section 62(1)(c) allotments, FEMA pricing compliance and Section 56(2)(x) positions, prepared under the ICAI Valuation Standards.
Lead Advisory Services
Running the mandate itself: buyer and investor identification, information memorandum, process management and negotiation through to signing.
Forensic Advisory & Investigation
Where diligence turns up indicators of fraud, a scoped investigation with an evidence trail that holds up outside the deal room.