INDIA Law and Practice Contributed by: Kunal Chandra, Kabeer Mathur, Chinmay Bilgi, Sharnam Vaswani and Rajdeep Mukherjee, Trilegal
deal value of approximately USD7 billion. Strategic buyers and long-term institutional investors have actively pursued acquisitions in the sector, driven by the stability of contracted revenues, India’s renewable energy targets and supportive regulatory frameworks.
trol of the target is acquired by resolution plan approved by creditors and the NCLT under which the target’s liabilities are typically restructured. • Business transfers Acquisitions of specific business divisions or operational units may be structured as a “slump sale” – the transfer of an undertaking on a going-concern basis together with its associated assets and liabilities for a lump-sum considera - tion. This structure is commonly used for business carve-outs or internal restructurings. It is often pre - ferred from a tax structuring perspective, as slump sales undertaken on a going-concern basis for a lump-sum consideration are exempt from liability under the Central Goods and Services Tax Act, 2017 and slump sale provisions under the Income Tax Act, 1961 (“IT Act”) treat the entire undertaking as a single capital asset, providing greater certainty in the determination of capital gains on the transfer. 2.2 Primary Regulators M&A in India may involve one or more of the follow - ing regulators, based on factors such as transaction size, sector, involvement of foreign capital and listing status of the target: • Securities and Exchange Board of India (SEBI): regulates acquisitions involving listed companies, including open offer obligations and disclosure requirements under the Takeover Regulations and other securities laws. • Reserve Bank of India (RBI): oversees foreign investment and cross-border capital flows under the Foreign Exchange Management Act, 1999 (FEMA) and associated regulations, including pricing guidelines and sector-specific investment frameworks. • Registrar of Companies (RoC) and the Ministry of Corporate Affairs (MCA): administer corporate law compliance, filings and approvals under the Com - panies Act, 2013, the Limited Liability Partnership Act, 2008 and the Indian Partnership Act, 1932. • National Company Law Tribunal (NCLT): approves schemes of arrangement, mergers, demergers and insolvency resolution processes under the Compa - nies Act, 2013 and the Insolvency and Bankruptcy Code, 2016. • Competition Commission of India (CCI): reviews combinations (mergers, acquisitions and amalga -
2. Overview of Regulatory Field 2.1 Acquiring a Company
Acquisitions of companies or businesses in India are primarily structured through one of the following legal mechanisms: • Share acquisitions The most common method is the acquisition of equity securities of the target. Transactions may involve secondary purchases or primary investments, with consideration payable in cash or through non-cash consideration, includ - ing share swaps. For listed companies, open offers under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“Takeover Regulations”) (refer to 4.1 Principal Stakebuilding Strategies ) serve as a mechanism for purchasing shares from public shareholders. • NCLT-approved schemes: Acquisitions and group restructurings may also be carried out through schemes of arrangement under the Companies Act, 2013, which require approval of the National Company Law Tribunal (NCLT). This mechanism is typically used for mergers or multi-entity reorgani - sations, and allows for several transactions includ - ing demergers, capital restructuring and share swaps within a single, court-sanctioned process. While this provides considerable structural flexibil - ity, such schemes involve longer timelines due to statutory approval processes. A fast-track merger process is available for small companies, start-ups, holding companies and their wholly owned subsidi - aries, and fellow subsidiaries. The framework was extended in 2024 to permit reverse-flip mergers of foreign holding companies into wholly owned Indian subsidiaries. • Acquisition in insolvency process: Acquisitions of distressed companies may occur through the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016, which is also overseen by the NCLT. Via this route, con -
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