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1 Due Diligence for Investors

Due Diligence for Investors

When investing in a company – whether through private equity, venture capital, or strategic mergers and acquisitions (M&A) – it is crucial to understand the business inside out. Our comprehensive due diligence services help investors assess risks, uncover red flags, and make informed decisions with clarity.

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Services Offered

Financial Due Diligence: To assess the financial health of the target entity by analyzing historical financial statements, related party transactions, revenue quality, EBITDA normalization, working capital, net debt positions, etc.
Tax Due Diligence: To review direct and indirect tax compliances (such as Income Tax, TDS, GST), uncover past exposures.
Legal Due Diligence: To evaluate the legal standing of the target business, including review of agreements, litigations, intellectual property rights, labor laws and regulatory filings.
Compliance Due Diligence: To verify whether the company is operating in compliance with applicable laws, statutory licenses, FDI norms, and sector-specific regulations. This includes a review of ROC filings, share certificates, statutory registers, board and shareholder resolutions, documents under the Companies Act, 2013, and adherence to applicable Secretarial Standards.

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Our Process

Kick-off & Information Request

Initial alignment call followed by sharing of a detailed document checklist with the target company.

Data Room Setup

A secure folder structure (typically Google Drive) is created for uploading all requested documents.

Document Review

In-depth review of financials, legal agreements, tax returns, corporate records and other key documents to identify gaps.

Management Calls & Query Resolution

Discussions with the founders and investors on follow-up Q&A rounds.

Reporting & Finalization

Draft report is shared and discussed with stakeholders, followed by a final report capturing validated findings and key risks.

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FAQs on Due Diligence Services for Investors

Due Diligence for Investors

What if red flags are found—do you assist in resolving them?

Absolutely. We not only identify red flags but also support in drafting conditions precedent (CPs) or post-deal clean-up plans, enabling investors to move forward with greater confidence.

How do you interact with the target company during due diligence?

We share a detailed Information Request List (IRL), set up a secure data room, and coordinate calls with management to understand the business model. Throughout the process, we share queries, clarify gaps, and ensure transparent communication.

What key red flags do you typically uncover during Due Diligence?

Common red flags include:

Non-compliance with tax or regulatory laws
Undisclosed liabilities or legal disputes
Misstated revenues or margins
Weak internal controls
Unclear ownership of IP or corporate structure

Why is due diligence important ?

Clarity :

Understand the company’s true financial, legal, and operational position
Uncover what’s behind the numbers

Risk Identification:

Spot red flags (tax issues, liabilities, legal disputes)
Avoid hidden surprises after investment

Informed Decisions :

Make confident investment/acquisition decisions
Decide deal structure, valuation, and terms wisely

What is due diligence ?

Due diligence refers to a structured and thorough review of a business prior to an investment, acquisition, or partnership. It covers all critical aspects of the business, including legal, financial, tax, operational, and regulatory matters. In short, it’s the process that helps validate a company’s claims and ensures you’re not buying into unexpected liabilities.

What do you get in our due diligence report?

Our investor-focused due diligence report provides:

Executive summary with key red flags
Detailed analysis of financial statements
Legal and compliance observations
Tax risks and open exposures
Cap table and shareholder agreements review
Actionable insights and risk mitigation plans

Why is legal due diligence important?

Legal due diligence is essential for uncovering legal risks that can impact the deal or post-investment operations. It ensures the business is legally sound, compliant, and free of critical issues that could derail the transaction. Our legal due diligence helps answer:

Are all contracts, licenses, and agreements valid and enforceable?
Is there any ongoing or potential litigation exposure?
Who owns the intellectual property—and is it protected?
Are there any breaches of laws, shareholder rights, or corporate governance norms?
Will any legal issues impact deal closure or post-investment integration?

Why is financial due diligence important?

Financial due diligence is more than just validating numbers—it’s about assessing sustainability, scalability, and credibility. Our financial due diligence services help answer: