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—Guide
Buying a Company in India: Valuation, Due Diligence and Deal Structure
A buyer's guide to acquiring an Indian company: valuing the target, what diligence should cover, choosing the structure, and protecting yourself in the deal.
Think Filing Team30 September 2026 2 min read
Buying a company can accelerate growth — or saddle you with problems you didn't see. A disciplined approach to valuation, diligence and structure protects the buyer. This guide walks through it.
Valuation
Value the target using more than one method:
- Discounted cash flow, based on projected cash flows.
- Comparable company or transaction multiples.
- Asset-based value, for asset-heavy businesses.
Then adjust for what diligence finds — quality of earnings, working capital needs, and debt-like items.
Due Diligence
- Financial: sustainable earnings, working capital, net debt.
- Tax: exposures under income tax, TDS, GST and transfer pricing.
- Compliance: ROC filings, labour, licences, FEMA.
- Legal: contracts, litigation, IP, property title.
- Commercial and operational: customers, key people, systems.
Structure
- Share purchase: simplest, but inherits all liabilities.
- Business transfer: can leave liabilities behind, but more complex.
- Merger: combines companies through the NCLT or fast-track route.
Protecting the Buyer
- Warranties from the sellers about the business.
- Specific indemnities for known exposures.
- Escrows or holdbacks of part of the price.
- Completion accounts or locked-box mechanisms for the price.
- Conditions precedent — issues fixed before closing.
Regulatory Points
- Competition Commission approval above the thresholds.
- FEMA compliance for foreign buyers.
- Loss of carried-forward tax losses on a change in shareholding, subject to exceptions.
After Closing
Plan integration — finance, payroll, systems, compliance — before closing, so the business keeps running smoothly.
Getting Help
Think Filing supports buyers with valuation, diligence, structuring and integration.