INVESTORS STEP UP DUE DILIGENCE
DEAL CLOSURES ARE taking longer as investors are consuming a lot more time in due diligence than before, said top investment bankers.
Control deals typically take six to eight months now as compared to the four to five months' timeframe that would be taken by investors before the pandemic, Chandresh Ruparel, managing director and India head at Rothschild & Co, a global investment bank, said.
"There has been a lot of focus and a lot more attention on conviction for proof of concept, sustainability of revenues and profits," Ruparel said. In addition to the traditional accounting, financial, tax and legal diligence, "ghost visits" are being conducted in some cases and forensic style diligence is carried out in other instances," he said.
Ruparel added that the deal activity that happened during the pre-Covid years was something which was probably not even thought of. "I don't want to compare that period because it was a lot more ebullient, and a lot of easy money was available. There was a FOMO effect maybe which led to speed-dating and closing," he said. Value of deals have already come down. PE deals in the first half of this year have come down by 61% in the country, according to data from Refinitiv.
This story is from the August 14, 2023 edition of Financial Express Mumbai.
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This story is from the August 14, 2023 edition of Financial Express Mumbai.
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