India: M&A/Private Equity

This practical position is also reflected in the manner in which listed companies generally evaluate related party transactions. Although price or value remains the primary reference point for approval thresholds and arm’s length assessment, the review is not usually limited to price alone. Well-governed listed companies through their audit committees typically conduct a qualitative assessment of the transaction first, examining the nature of what is being supplied, received, or foregone, and it is on the basis of that assessment that they determine whether the stated price or value is justified.