Merger and Acquisition Advisory Services
In India
Transaction structuring on tax and liability, NCLT schemes under Sections 230 to 232, fast track mergers under Section 233, slump sale and share purchase — with valuation, diligence and post-completion compliance under one roof.
Overview
What Is the Difference Between a Merger and an Acquisition?
The commercial logic of an acquisition is usually the easy part. The difficulty lies in choosing the route — a court-approved scheme, a fast track merger, a business transfer or a straightforward share purchase — because that choice determines the timeline, the tax cost, which liabilities travel with the deal, and whether you are waiting on a tribunal for eight months.
In a merger, two or more companies combine and at least one ceases to exist, with its assets and liabilities transferring to the surviving entity by operation of law. In an acquisition, one company obtains control of another which continues to exist as a separate legal entity, usually through a purchase of shares.
The practical difference is what happens to liabilities. A merger under a scheme transfers everything — known, unknown, contingent and disputed — to the transferee company by order of the tribunal. A share purchase leaves the liabilities inside the target, which you now own, so the protection has to come from warranties and indemnities in the agreement rather than from the structure itself.
A third route sits between them. A slump sale, or business transfer, moves an identified undertaking as a going concern for a lump sum without assigning individual values to assets. It is often the cleanest option when the buyer wants a business but not the company history that came with it.
N D Savla & Associates advises Indian companies on mergers, acquisitions, demergers and business restructuring. We work through the structuring decision, run the valuation and diligence, prepare the scheme or transaction documents, and take the matter through the approval process. Where the transaction is a formal scheme, it runs alongside our merger, amalgamation and restructuring practice before the National Company Law Tribunal.
Choosing a Route
Which Transaction Route Fits Your Situation?
Four routes cover most Indian transactions, and they differ sharply on timeline, cost and what transfers.
| Route | How It Works | Timeline and Key Consideration |
|---|---|---|
| NCLT scheme (Sections 230–232) | Court-approved scheme of arrangement or amalgamation | 8–14 months; all liabilities transfer by operation of law |
| Fast track merger (Section 233) | Simplified route for small companies and holding-subsidiary | 4–7 months; no NCLT hearing, approval via Regional Director |
| Slump sale / business transfer | Undertaking transferred as a going concern for lump sum | 2–4 months; identified liabilities only, capital gains on transfer |
| Share purchase | Buyer acquires shares from existing shareholders | 2–4 months; target retains all history, protection via warranties |
| Asset purchase | Specific assets acquired individually | 1–3 months; GST implications, no goodwill continuity |
Note: the fast track route under Section 233 of the Companies Act, 2013 is available to small companies, to a holding company and its wholly owned subsidiary, and to certain other prescribed classes. Where a transaction qualifies, it avoids the tribunal process entirely and typically saves six months or more.
Who It Is For
Who Needs Merger and Acquisition Advisory?
Four situations account for most of the transactions we work on.
Groups Consolidating Multiple Entities
Family businesses frequently accumulate entities over decades — one for each product, each property, each partnership arrangement. The result is duplicated compliance, trapped losses and a structure no buyer or investor will accept. Consolidation through a merger scheme simplifies the group, though the tax treatment of accumulated losses under Section 72A of the Income-tax Act requires careful attention to the conditions.
Companies Acquiring a Business or Competitor
A buyer needs to know what they are actually purchasing before they commit. Financial, tax and legal due diligence establishes the real earnings position and the liabilities attached to it, and directly determines both the price and the structure. Findings routinely convert a proposed share purchase into a slump sale because the buyer declines to inherit the target history.
Promoters Selling All or Part of a Business
Sellers face a different set of questions: valuation basis, tax on the gain, warranty exposure after closing, and whether an earn-out is being used to bridge a price gap. Preparation matters more on the sell side than the buy side, because everything found in diligence reduces the proceeds directly. A defensible business valuation should be in hand before conversations begin.
Companies Demerging a Division or Restructuring
Separating a business unit into its own entity ahead of a sale, a fundraise or a family settlement follows the same scheme process as a merger. Demergers require careful attention to the conditions for tax neutrality, since failing one of them converts what was intended as a reorganisation into a taxable transfer.
Context
How Has M&A Regulation Evolved in India?
The regulatory framework governing Indian mergers has been rebuilt twice in three decades, and the current process is a direct result of that history.
Restructuring under a restrictive regime
The Monopolies and Restrictive Trade Practices Act, 1969 required government approval for expansion by larger enterprises, and mergers were treated with suspicion as a route to concentration. Amalgamations under the Companies Act, 1956 went before the High Courts. With capacity licensed and growth constrained, acquisition as a competitive strategy had limited room to operate.
Liberalisation opens the market for corporate control
The 1991 reforms dismantled the MRTP restrictions on expansion and permitted foreign investment across most sectors, making acquisition a mainstream growth strategy for the first time. SEBI introduced the Takeover Regulations in 1997, replaced by the current framework in 2011, governing acquisitions of listed companies. The Competition Act, 2002 replaced MRTP and, once the combination provisions were notified in 2011, brought merger control into a modern antitrust framework with thresholds and mandatory notification.
The modern process takes shape
The Companies Act, 2013 rewrote the merger provisions. Sections 230 to 232 govern schemes of arrangement and amalgamation, and Section 233 introduced the fast track route for small companies and wholly owned subsidiaries — a genuine simplification for transactions that never needed judicial supervision. Jurisdiction moved from the High Courts to the National Company Law Tribunal, which became operational in June 2016. The Insolvency and Bankruptcy Code, 2016 created a parallel route through which distressed businesses change hands under a resolution plan.
Registered valuers and GST reshape deal structuring
NCLT benches handle scheme approvals across the country, with timelines that have improved but still run to several months for the standard route. Registered valuer requirements under Section 247 of the Companies Act, 2013 mean valuation for a scheme must be carried out by a person registered with the Insolvency and Bankruptcy Board of India. GST has replaced the earlier indirect tax treatment of business transfers, and transfer of a business as a going concern is treated differently from an asset-by-asset sale — a distinction that materially affects deal structuring.
Our Process
How Does an M&A Transaction Work?
A transaction runs in eight stages. Timelines vary widely: a share purchase can close in two months, while a scheme through the tribunal takes eight to fourteen.
Objective and Structuring Discussion
Preliminary Tax and Regulatory Analysis
Section 72A & stamp duty analysis
Valuation
Section 247 registered valuer
Due Diligence
Negotiation and Term Sheet
Scheme Drafting or Transaction Documentation
Approvals and Filings
Completion and Post-Closing Integration
Where the transaction qualifies for the simplified route, we take it through as a fast track merger. Valuation for schemes is issued through registered valuer services, and the definitive papers are prepared as part of our transaction agreements work.
The appointed date and the effective date are not the same, and the gap between them is frequently months. Accounting, tax computations and profit entitlement all run from the appointed date, so the treatment of the intervening period must be settled in the scheme rather than resolved afterwards.
By Sector
How Does M&A Differ by Sector?
The process is consistent. What changes is where the value and the risk actually sit.
Manufacturing and Industrial Businesses
Diligence weight falls on fixed assets, physical inventory verification, environmental and factory licences, and existing charges on assets. Land title is frequently the longest item to clear, particularly for older units where the chain of documents is incomplete. Transfer of pollution control consents, factory licences and power connections must be planned into the timeline rather than assumed to follow the merger order.
Technology and SaaS Companies
Value is concentrated in intellectual property, recurring contracts and the team, so the central diligence questions are whether IP was formally assigned by founders, employees and contractors, and whether customer contracts survive a change of control. ESOP treatment is a negotiated item that affects both the purchase price and employee retention. Earnings quality is usually tested through a supporting financial model rather than accepted from the accounts.
Healthcare, Education and Regulated Sectors
Licences and approvals dominate. A hospital, diagnostic chain or educational institution cannot operate without its registrations, and whether these transfer automatically on a merger or require fresh application determines the structure. Professional registration requirements for key personnel and any restrictions on ownership by non-professionals need to be resolved before terms are agreed.
Financial Services and NBFCs
Regulated financial entities require prior approval for change in control, and the approval process runs in parallel with the transaction rather than after it. Fit and proper criteria apply to the incoming shareholders and directors, capital adequacy must be maintained through the transition, and the regulator timeline usually governs the overall completion date regardless of how quickly the commercial terms are settled.
Why Us
Why Choose N D Savla & Associates for M&A Advisory?
These are the five things clients tell us made the difference.
The route is chosen after assessing capital gains treatment, loss carry-forward, stamp duty and which liabilities travel — because that analysis is worth more than anything negotiated later on price.
Findings feed straight into the valuation and the indemnity negotiation instead of being relayed between three firms with different assumptions.
Valuation under Section 247 of the Companies Act, 2013 is a statutory requirement for a scheme, and having it in-house keeps the timeline under control.
We tell you at the outset whether a matter is a four-month fast track or a twelve-month tribunal process, so commercial commitments are made against a calendar that will hold.
Post-merger accounting on the appointed date basis, registration transfers and the compliance reconstruction of the surviving entity are handled properly rather than left to the client team.
Scheme filings, Registrar submissions and the prescribed forms are worked directly from the requirements published by the Ministry of Corporate Affairs at mca.gov.in, so procedural defects do not cost a hearing date.
Frequently Asked Questions
Frequently Asked Questions About Mergers and Acquisitions
What is the difference between a merger and an acquisition?
How long does an NCLT merger take in India?
What is the difference between a slump sale and a share purchase?
Is a valuation report mandatory for a merger?
Do accumulated losses carry forward after a merger?
Talk to an M&A Adviser in Mumbai
Tell us what you are trying to combine, buy or separate. We will set out the routes available, what each costs in tax and time, and which one fits.
Speak to N D Savla & Associates10:00 AM – 7:00 PM
