Increased globalization is taking firms to new geographies and markets. Mis-representation and fraud are among the two biggest risks that firms run into, while entering into contracts with hitherto unknown companies.
A large number of opportunities emerging in India relate to unlisted companies in unorganized and under-documented sectors, where information on company background, management, company reputation, history, legal issues etc. are not available through secondary information sources. In-depth evaluation of potential business partners, distributors, contract manufacturers, customers, vendors, service providers and investees is required as an essential element of risk management.
At ValueNotes, we are on the radar of global investment consultancies, fund managers, PE / VC investors, sourcing consultants and research firms, for comprehensive due diligence on Indian companies, listed and unlisted. In many instances, our research has been critical in saving companies from fraudulent transactions. Our streamlined due diligence process is comprehensive and ensures in-depth coverage of the target firm’s:
- Registration credentials
- Litigation status, the company and its management
- Plant, machinery, scale, operations, through physical verification at site
- Financial credibility
- Management checks – key management personnel, litigation checks, background checks
Some of the projects involving due diligence that we have worked on include:
Ongoing contract with client to conduct extensive due diligence on Indian private companies in specific sectors, to enable end-clients take appropriate decisions around prospective partnerships.
Protected client from partnering with an Indian distributor who had made gross misrepresentations. Our research found inflated sales figures, non-existent office, criminal cases against promoter and company’s history of broken JVs.
Studied select target companies for acquisition based on defined strategic initiatives of the client and expected valuation. Evaluated the companies’ current operations and analyzed the extent of fit with client’s business.
Verified the physical presence of the companies, their major business lines, ascertained their reputation in the market and the management’s background and credentials by interviewing clients, vendors, employees and other market participants.
Profiled a specific business family in India by conducting extensive due-diligence on their companies’ activities, management background, personal and business reputation, political networks, power sharing agreements, etc.
