Private equity (transactions)—India—Q&A guide

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Private equity (transactions)—India—Q&A guide
  • 1. What different types of private equity transactions occur in your jurisdiction? What structures are commonly used in private equity investments and acquisitions?
  • 2. What are the implications of corporate governance rules for private equity transactions? Are there any advantages to going private in leveraged buyout or similar transactions? What are the effects of corporate governance rules on companies that, following a private equity transaction, remain or later become public companies?
  • 3. What are some of the issues facing boards of directors of public companies considering entering into a going-private or other private equity transaction? What procedural safeguards, if any, may boards of directors of public companies use when considering such a transaction? What is the role of a special committee in such a transaction where senior management, members of the board or significant shareholders are participating or have an interest in the transaction?
  • 4. Are there heightened disclosure issues in connection with going-private transactions or other private equity transactions?
  • 5. What are the timing considerations for negotiating and completing a going-private or other private equity transaction?
  • 6. What rights do shareholders of a target have to dissent or object to a going-private transaction? How do acquirers address the risks associated with shareholder dissent?
  • 7. What notable purchase agreement provisions are specific to private equity transactions?
  • 8. How can management of the target company participate in a going-private transaction? What are the principal executive compensation issues? Are there timing considerations for when a private equity acquirer should discuss management participation following the completion of a going-private transaction?
  • 9. What are some of the basic tax issues involved in private equity transactions? Give details regarding the tax status of a target, deductibility of interest based on the form of financing and tax issues related to executive compensation. Can share acquisitions be classified as asset acquisitions for tax purposes?
  • More...

Private equity (transactions)—India—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to private equity (transactions) in India published as part of the Lexology Getting the Deal Through series by Law Business Research (published: February 2021).

Authors: Khaitan & Co—Aakash Choubey; Sharad Moudgal

1. What different types of private equity transactions occur in your jurisdiction? What structures are commonly used in private equity investments and acquisitions?

Private equity (PE) transactions in India broadly comprise early-stage investments, including seed capital, angel investments and venture capital, growth capital, including expansion capital, and late-stage investments, private investments in public equity, buyouts and turnaround capital. Traditionally, early stage transactions in India fell under the umbrella of venture capital investments. However, this trend has changed in the past few years, with many traditional venture capital investments rivalling PE investments in terms of deal size and valuation.

Most PE investments in India occur in closely held unlisted companies. PE investments in listed companies are less frequent for a number of reasons, including the following:

  1. the lack of quality assets for PE investors to commit substantial funds;

  2. the inability of PE investors to complete 'going-private' deals on account of the inefficiencies of India's delisting regulations and the limited options available to complete minority squeeze-outs;

  3. the limited extent to which PE investors may seek enforcement of shareholder rights customarily sought in such transactions; and

  4. the inability of

Popular documents