Buy Side and Sell Side Execution
Between a term sheet and a completed transaction sit the mechanics: information, documentation, the risk allocation in the warranties and indemnities, the conditions that have to be satisfied, and the way the price is finally fixed. This guide covers the parts of that sequence where financial and commercial judgement does the work.
- Running a sell side process, and running a buy side one
- Term sheet points that are not really non-binding
- Warranties, indemnities, escrow and insurance
- Locked box against completion accounts
- Stamp duty, listed-company triggers and the first hundred days
Two sides of the same sequence
Sell side
Prepare the business and the information before approaching anyone. Build a target list that reflects who would actually pay a premium and why. Control the flow of information in stages so that the most sensitive material moves only when a buyer is committed. Maintain competitive tension for as long as it is real, and know when it is not, because a process kept alive artificially costs credibility.
Buy side
Establish what you are willing to pay and why before you see the seller's number, so that the anchor is yours. Scope diligence to the things that could change that answer. Identify the walk-away conditions in advance and write them down, because they are much harder to identify honestly once a team has spent three months on a deal.
The clauses that bind even when the document says it does not
A term sheet is usually expressed as non-binding, and mostly it is. Three things in it are not, and they are the three worth negotiating properly: exclusivity, which removes your competitive position for its duration and should be as short as the diligence realistically requires; confidentiality, which survives the transaction failing; and cost allocation, which decides who pays for the process if it does.
Beyond the binding clauses, the commercial value of a term sheet lies in settling the points that are expensive to reopen. The price mechanism, the treatment of cash and debt, the completion mechanism, the outline of the warranty and indemnity package, and the conditions precedent. A term sheet that settles only the headline price has deferred every hard conversation to a point where one side has much less leverage than it had at the start.
Warranties, indemnities and the security behind them
Warranties are statements of fact about the target which, if untrue, give rise to a damages claim. Indemnities are promises to reimburse a specific identified risk on a rupee-for-rupee basis. The distinction matters commercially: a warranty claim requires proof of loss and of causation and is subject to negotiated limits, while a well drafted indemnity for an identified tax exposure pays out on the event.
The limitation package is where the real negotiation happens. A time limit, typically shorter for commercial warranties and longer for tax to match the assessment period. A financial cap, often a proportion of consideration rather than all of it. A de minimis for individual claims and a basket that has to be filled before any claim can be brought. And the disclosure regime, which determines whether something found in diligence is treated as disclosed and therefore outside the warranty.
Security behind the package matters more than its size. A generous cap against a seller who will have distributed the proceeds is a number rather than a remedy. Escrow, a deferred payment, or a parent guarantee turn the package into something collectable.
Insurance is the other way to make the package collectable, and it is available here. Warranty and indemnity insurance is used in Indian transactions, principally on private equity exits, competitive auctions and any deal where the seller needs a clean exit. Buyer-side policies are much the more common of the two. An Indian-resident insured ordinarily takes cover from a general insurer registered with the Insurance Regulatory and Development Authority of India, which may sit on offshore reinsurance capacity behind it. No instrument specifically prohibiting or prescribing the product had been identified as at 17 September 2026: it is regulated as an ordinary general insurance product.
Where the buyer is not resident, an offshore policy covering its acquisition of an Indian target is generally workable, provided the contract and the premium stay offshore. What is not an unrestricted route is an Indian resident buying cover directly from an insurer not registered here: that has to be supported by an applicable general permission or a specific approval, and it engages the Insurance Act, the exchange control regulations on insurance and the rules on paying premium and receiving claim proceeds. If an Indian buyer, seller or the target itself is named as co-insured, beneficiary or loss payee under an offshore policy, the structure is worth clearing before cover is bound rather than after.
Two practical points. Cover is for unknown breaches, so a policy is negotiated alongside the diligence rather than after it, and anything already disclosed or identified is outside it. And the insurer will read the diligence, which means a thin scope narrows the cover.
Locked box against completion accounts, and the constraint that may decide it
Under a completion accounts mechanism, the price is fixed after completion by preparing accounts at the completion date and adjusting for the difference between actual and target working capital, cash and debt. It is accurate and it is the source of most post-completion disputes.
Under a locked box, the price is fixed by reference to a historical balance sheet, with the seller undertaking not to extract value between that date and completion except by permitted leakage. It is certain, it is faster, and it requires the buyer to have done enough diligence on the locked box date to be comfortable with it.
On a domestic deal the choice is commercial. On a cross-border deal it may not be, because a completion accounts mechanism holds part of the consideration back and exchange control limits how much and for how long. Rule 9(6) of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 still applies: no more than twenty-five per cent of the total consideration on a transfer of equity instruments between a resident and a non-resident may be deferred, held in escrow or covered by a seller indemnity, in aggregate, and for no longer than eighteen months from the date of the transfer agreement. No amendment removing or relaxing it had been identified as at 17 September 2026.
Neither mechanism is prohibited by that rule, but each has to be built inside it. A locked box works, provided any leakage-related retention or indemnity stays within the twenty-five per cent and the eighteen months. Completion accounts work, provided the post-completion adjustment, when it crosses the border, complies with Rule 9(6), the pricing guidelines and the valuation methodology the parties agreed. The label on the money does not decide the question: a holdback, a retention, an earn-out and a completion accounts adjustment are all measured against the same ceiling. Anything above it, or running beyond eighteen months, needs a structure otherwise permitted under the exchange control regime or a specific approval, and that is a conversation to have at term sheet stage rather than at completion.
What changes when either side is listed
Where the target is listed, the takeover regime engages. Under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, an acquisition taking the acquirer to twenty-five per cent or more of shares or voting rights triggers an open offer. A holder already at or above twenty-five per cent but below the maximum permissible non-public shareholding may acquire more than five per cent in a financial year only after an open offer. Acquisition of control triggers independently of any percentage. The minimum open offer size is twenty-six per cent of the target's share capital, and a voluntary open offer is for a minimum of ten per cent.
Those figures are the Board's own, from its published FAQ dated March 2022, and the Regulations have been amended since. The consolidated Regulations are described as last amended on 5 December 2025, and an amendment of that date is reported to introduce a mandatory independent valuation of infrequently traded shares. We have not been able to read the amending text, so the trigger and open offer percentages above are stated as at March 2022 and the December 2025 change is not described here. That check is on our own review register. There is a specific trap worth naming: the page at the Board's site under acts and titled takeover regulations serves the 1997 regulations, not the 2011 ones. It is well indexed and looks authoritative, and drafting from it produces a fifteen per cent trigger and a twenty per cent open offer, both wrong.
Who collects it, and what the schedule actually charges
Since 1 July 2020 stamp duty on securities transactions is collected through market infrastructure rather than by the parties. Stock exchanges collect on exchange transactions; depositories collect on off-market transfers and on issue in dematerialised form; clearing corporations and registrars and transfer agents also act as collecting agents. Collected duty is transferred within three weeks to the State Government where the buyer resides, and a collecting agent may retain 0.2 per cent of the duty collected as facilitation charges.
The rates have been uniform across the country since 1 July 2020 and are set out in Schedule I to the Indian Stamp Act, 1899.
| Instrument or transaction | Schedule I provision | Rate |
|---|---|---|
| Issue of a debenture | Article 27(a) | 0.005 per cent |
| Transfer or reissue of a debenture | Article 27(b) | 0.0001 per cent |
| Issue of a security other than a debenture | Article 56A(a) | 0.005 per cent |
| Transfer of a security other than a debenture, on delivery basis | Article 56A(b) | 0.015 per cent |
| Transfer of a security other than a debenture, on non-delivery basis | Article 56A(c) | 0.003 per cent |
Schedule I to the Indian Stamp Act, 1899, in force from 1 July 2020. Confirmed by our subject matter expert on 17 September 2026.
Three things about that table are worth saying out loud, because each of them is commonly got wrong. Article 27 does not prescribe separate delivery and non-delivery rates: for a debenture the only distinction is between issue and transfer or reissue. The 0.015 per cent delivery rate is the one that applies to an ordinary off-market transfer of shares under a share purchase agreement, because beneficial ownership changes; the 0.003 per cent non-delivery rate belongs to trades settled without delivery and is not the acquisition rate. And duty on an issue is charged on the value of the security issued, while duty on a transfer is charged on the consideration or the market value determined under the statutory valuation provisions.
These are the central rates on the securities themselves. They are not the duty on the underlying document. A share purchase agreement, a business transfer agreement or a conveyance remains governed by the applicable state stamp legislation, and on a business transfer that is frequently the larger number of the two.
The hundred days, planned before signing
Integration planning that starts after completion has already lost the period in which it is cheapest to act. The plan should exist at signing, with an owner for each workstream and a date, and it should be built around the specific synergies that justified the price rather than around a generic checklist.
Four things reliably need attention in the first hundred days. Reporting, so that the acquirer can see the business monthly on a consistent basis from month one. People, and specifically the individuals whose departure would damage the value acquired, identified and spoken to early. Customers and suppliers, particularly any contract with a change of control clause, which should have been identified in diligence. And the synergy tracking itself, measured against the model that supported the price, because a synergy that is not measured is a synergy that is quietly abandoned.
Questions about execution
How long should exclusivity be?
As long as the diligence realistically needs and no longer. Long exclusivity removes the seller's only real leverage, which is why buyers ask for it, and it reliably slows a process down because the pressure that was driving it has been removed.
Should the seller prepare completion accounts or the buyer?
Whoever prepares them has an advantage, which is why it is negotiated. What matters more is that the accounting policies and the specific inclusions are defined in the agreement, with a named expert determination route if the parties disagree.
What is the most common execution failure?
Leaving the completion mechanism and the working capital definition to be worked out later, on the basis that they are technical. They are the price.
Where to go next
Transaction Advisory Services
Back to the main page: what we do on a deal, how an engagement is structured, and how to reach us.
Preparing for a Transaction: Structures and Approvals
The structuring choice made before anything else, and the approval map that follows from it. Share purchase, asset purchase, slump sale, scheme of arrangement and the fast-track route that got considerably wider in 2025.
Financial and Tax Due Diligence
Quality of earnings, normalised working capital, debt and debt-like items, and the tax exposures a buyer inherits. What a diligence report is, what it is not, and how findings move price and paper.
Fundraising: Equity, Debt and Capital Markets
Private rounds, the rewritten external commercial borrowing framework, and what changes when the route is public markets, including the tightened small and medium enterprise listing regime.
Restructuring, Distressed Deals and Exits
Resolution outside insolvency under the Reserve Bank's 2025 directions, transactions under an extensively amended Insolvency and Bankruptcy Code, carve-outs, and the exit routes with their current tax treatment.
Send an enquiry
Tell us which side you are on and where you are in the process. If you are between term sheet and signing, the completion mechanism is usually the conversation worth having first.
Position as at 17 September 2026. Reviewed every six months.
This page is general information, not professional advice. Transaction law and transaction tax in India both moved substantially between September 2025 and April 2026. The fast-track merger route was widened, the external commercial borrowing framework was rewritten, the Reserve Bank replaced its stressed asset framework, the Insolvency and Bankruptcy Code was amended extensively, and the taxation of a share buyback changed for the second time in eighteen months. Every position on these pages was reviewed by a qualified professional in September 2026 and carries the date it was confirmed. Take professional advice before acting on anything on this page. We are happy to be that adviser, but we do not act on a web page, ours or anyone else's, without one.