India: M&A/Private Equity

MARS Equity Dragon Fund VCC, managed by a subsidiary of MUFG Bank, acquired a 2.74% stake in both Krazybee Services Limited and Finnovation Tech Solutions Private Limited, the entities behind the KreditBee lending app. The acquisition included access to commercially sensitive information and observer rights, triggering Competition Commission of India review despite the small stake size.

Legal work first moved to India to save money. Today’s centres are expected to own that work, and whether they succeed turns on design choices that a cost model won’t show

The Bangalore bench of the Income Tax Appellate Tribunal (‘ITAT’) has held that ESOP expenditure cross-charged by a foreign holding company to its Indian subsidiary is allowable as a deduction under section 37(1) of the Income-tax Act, 1961 ('Act'). The Tribunal reiterated that ESOP discount constitutes employee compensation and gives rise to an ascertained liability during the vesting period and that the possibility of future forfeiture, non-exercise of options, or issuance of a valuation report after the financial year-end does not render the liability contingent or hypothetical.

Business transfers can fail even after legal closing when operational contracts, tax and stamp-duty treatment, and governance rights have not been dealt with together. The buyer may acquire the business legally but still face disrupted operations, restricted commercial rights or unexpected tax liabilities from the first day.

A modest regulatory penalty can sometimes carry a larger transaction lesson. The recent adjudication order involving Fyle Technologies Private Limited is a good example. The Registrar of Companies, Bengaluru, penalised the company and four of its directors for approving share transfers in physical form even though the transferors had not first dematerialised their holdings.

Structuring an acquisition carries real consequences for control, liability, tax treatment, and continuity of a target’s contracts and licenses. The reverse triangular merger (“RTM”), or reverse subsidiary merger, is among the most widely used structures in USA M&A practice for the way it treats the target after closing.

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A quick-commerce platform often believes that the most difficult phase in its restructuring is complete once domestic ownership crosses the 50% threshold. The more consequential questions emerge when auditors test whether contracts and internal processes reflect that new ownership reality.

India has transformed its mergers and acquisitions landscape through sweeping legislative reforms and liberalized foreign investment policies, driving deal values to USD124 billion in 2025.