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Tips to Choose the Right M&A Advisory Firms in India

Tips to Choose the Right M&A Advisory Firms in India

All business continues to grow with each passing day. From the day it is established, it has to be nurtured, to let it mature and grow. However, like any living and non-living object, it declines, and there might be a chance for it to re-grow into something bigger and better. Taking up innovative challenges are a part of M&A advisory services in India.

Mergers & Acquisitions is a process that prevents an organisation from drowning. It is also a way of re-establishing a business with new strategies and policies. For a smaller organisation, a merger is a better way to overcome present challenges and to match with other larger businesses.

The M&A market space is ever-growing in India. There is a steady demand for good quality M&A advisory firms in India providing compliance services. With the growing number of businesses adopting this inorganic route of boosting their business growth strategy, it becomes crucial for them to identify the appropriate opportunities in their relevant domain and match their competitors path of development. To ensure relevant criterion are met, investing companies require the support from M&A advisors.

M&A services are relatively more important for foreign investors, as they have no knowledge or experience in the Indian market. Advisors play a crucial role in handling transactions, scouring support of buyers and sellers, documentation reviews, support in debates and discussions, and concluding transactions.

When is the right time for a merger?

A small business should consider a merger when:

  • There is a situation leading to an acquisition
  • To increase turnover
  • To increase market share at par with other competitors
  • Considering corporate restructuring to overcome debt and bring new shareholders

How does M&A advisory services in India help small businesses?

Organisations having a vision and prospect have knowledge of mergers and acquisitions. They also understand how this kind of deal could help them. They help and support in some of the following ways:

  • By recognizing business partners with the same expectations from the company. Advisory firms use the network and ensure proper promotion.
  • Organizing professional services, both legal and financial services
  • Value those business ventures and financials that help you to locate a relevant partner
  • Structure financial transactions with respect to payment and agreement process

The correlation

An investment decision is always taken for some reasons such as:

  • To eliminate or reduce competition
  • To increase market share
  • To expand into a new arena and integrate some business activities with the target company for better returns and profitability

M&A transactions are tricky. However, when planned carefully, they can yield a good result.

It requires businesses to have in-depth knowledge of the industry, its dynamics, investor expectations with respect to the market and investments, and clarity of the evaluation strategy. That is the only way to ensure all the key parameters are met for a proper investment.

National rules & regulations

Carrying out M&A transactions in India or any other country requires businesses to adhere to the applicable rules and regulations. Indian financial advisors provide necessary assistance in this process on different regulations set by the government on that particular sector prior to investment, foreign exchange rules, company law regulations, income tax & GST regulations, SEBI provisions, etc.

M&A advisory firms based in India are well-versed with all these rules and regulations and can easily provide a structured framework to execute transactions and necessary government permissions. Likewise, tax consultants in India can also assist foreign investors to achieve clarity of taxation in India with respect to such transactions.

Benefits of acquisition

The benefits of mergers and acquisitions often exceed other strategies. Acquisitions are quick enough to shift the position of the organisation by providing the following benefits:

  • Improved access to clients in the new market
  • Enhanced marketing strategies
  • Fundamentally dynamic market position
  • Gainful critical mass, strength, and  capability in the high margin or high impact services
  • Rounding out overall capabilities in the areas that are lagging behind
  • Creating boundaries precluding the entry into this competitive market
  • Improving business relationships with referral sources
  • Facilitating reorganized operations and service distribution to reduce service delivery charges
  • Offering operational service capacity at a much lower cost within a specific time frame
  • Enhanced organisation financial performance as well as credit rating, thus improving access to funds and lowering total cost of capital

Features of an M&A advisory firm:

  • Before finalizing an M&A advisory firm in India for compliance services or other services, it is suggested to research necessary information about the organisation as well as its experience in the field.
  • Follow the national and international reputation of the company and the clients they have serviced before merging
  • Conduct a SWOT analysis (Strength, Weakness, Opportunity, Threat) of the merger agreement and identify the practical values before approaching an advisory firm
  • Check if the firm has expertise in a specific product line, deals execution, service line, and region of service
  • Consider the cost of the advisory firm – registration fee, sign-up fee and monthly retainer fee

As M&A advisory firms in India are accessible to small and large businesses, it is essential to assess all the relevant aspects of the business. It is further suggested to choose an advisory firm offering compliance services that aspire to exceed beyond the agreement.

Specialist firms in India provide consistent services in the vast space of transaction advisory. Leading firms provide fully equipped support to both domestic as well as foreign investors in the full cycle of the process of acquisition. Teams that have in-depth experience in matters related to taxation should be preferred to ensure there are no legal complications in any deal. Companies with a track record of providing support at every step of the transaction until the time of execution are also a reasonable consideration. Hence, before finalizing a company for compliance services, make sure all these parameters are met. A company that can address these basics would take the best interest in delivering unparalleled services.

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