While India continues to see a sharp rise in coronavirus cases, India Inc is striving hard to get back to business as usual.
Though the crisis is far from over, dealmakers are not deterred from pursuing their next discovery. However, the onslaught of Covid-19 has led to a significant change in the way acquisitions are conducted in India. While some buyers in the market are on ‘wait and watch’ mode, others are looking to purchase even in these unpredictable times.
Issues such as valuation are delaying due diligence timelines, and the risk of dropouts or walking away has increased. In this uncertain climate, parties need to consider the risk factors in the current volatile market and the potential impact the pandemic may have on people, business, and growth while they are engaged in negotiating transaction documents.
A specific area that may need to be re-evaluated in entirety is warranties and disclosures in transaction documents. Serious consequences and liabilities may arise if the warranties package is poorly negotiated or a standard ‘pre-Covid’ version is used.
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Article by Vishnu Nair and Rangam Sharma