INDIA Law and Practice Contributed by: Anuja Tiwari, Mallika Anand, Pranjal Bhattacharya and Antra Shourya, AZB & Partners
India has also set a capacity addition target of 80 MW of new coal-based thermal capacity by 2031–32 to meet rising power demands. 7. Due Diligence/Data Privacy 7.1 Energy and Infrastructure Company Due Diligence For mergers, demergers, and share acquisitions involving listed companies, the potential acquirers are provided with the opportunity to undertake a due diligence activity. The company may provide financial statements, material contracts, IP details, applicable permits and consents, details of litigation (both pend- ing and threatened), etc. However, any unpublished price-sensitive information (UPSI) can only be provided if the board is of the view that disclosing such information is in the best interest of the company and passes a resolution authorising the disclosure of UPSI. Nonetheless, in cases where a tender is floated, any UPSI of a company must be dis- closed in tender documents and – in cases where no tender is triggered – such UPSI must be made public before the deal is finalised. 7.2 Restrictions There are no regulatory restrictions on the quality or quantity of information that can be sought or provided in a due diligence process. However, the information provided to different bidders is based on the specific information sought by the bidders. Under the Takeover Regulations, the public announce- ment of an open offer (based on the events discussed in 4.2 Mandatory Offer ) must be made on the date of execution of the transaction documents (or, in indi- rect acquisitions, immediately afterwards) in the pre- scribed format. This is followed by a detailed public statement and, thereafter, the tender offer. For the acquisition of unlisted companies, there is no requirement to publicly disclose a bid regarding 8. Disclosure 8.1 Making a Bid Public
the acquisition. In mergers, demergers and business transfers, the board is required to make statutory dis- closures after approving the transaction. 8.2 Prospectus Requirements In business combinations (scheme-based mergers or demergers) between unlisted companies or business transfer transactions, there is no requirement to issue a prospectus. If the business combination involves a listed company, an abridged prospectus must be issued. Please note that there is no requirement for the buy- er’s shares to be listed on a specified stock exchange for it to acquire the shares of a listed company. 8.3 Producing Financial Statements In open offers, detailed financial statements of the acquirer do not need to be submitted, but limited audited financial information (eg, total revenue, net income, earnings per share) must be disclosed in the offer letter and the detailed public statement. In merg- ers and demergers, the financial statements of the entities must be provided to the exchanges for inspec- tion by the shareholders. The financial statements must be prepared in accord- ance with the applicable accounting standards. These include the accounting standards issued by the Insti- tute of Chartered Accountants of India, as well as the Generally Accepted Accounting Principles. 8.4 Disclosure of Transaction Documents In the acquisition of listed companies, the key terms of the transaction documents (eg, transaction type, any proposed change in control) must be specified in the tender offer and the detailed public statement, which are to be prepared in the standard formats prescribed by SEBI. The transaction documents do not need to be filed but must be made available for public inspec- tion during the tender offer period. If the proposed acquisition involves a sale of shares between residents and non-residents, the key extracts from the transaction documents are to be filed with RBI. Further, if the transaction triggers the requirement of a merger filing, then a copy of the transaction docu-
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