Buy and Takeover of NBFC Service

In response to the increasing demand for credit across corporate and industrial sectors, Non-Banking Financial Companies (NBFCs) have become pivotal players. Unlike traditional banks, NBFCs provide easier access to credit, making them highly attractive to businesses. However, stringent RBI norms can present significant challenges for new entrants. For businesses looking to leverage growth opportunities in the NBFC sector, acquiring an already registered NBFC can be an ideal solution. Our comprehensive NBFC Takeover Services are designed to streamline this process and ensure successful business transactions.

What is an NBFC Takeover?

An NBFC takeover involves acquiring a 100% stake in an operational RBI-registered NBFC. This acquisition results in the transfer of assets, liabilities, and shares to the acquirer.

Types of NBFC Takeovers

Friendly Takeover

In a friendly takeover, the target NBFC proposes the acquisition to the acquiring company. Upon approval, the transaction proceeds amicably.

Hostile Takeover

A hostile takeover involves the acquiring company forcing the takeover proposal on the target NBFC, often using aggressive tactics.

Our NBFC Takeover Checklist

1. Background Vetting

We thoroughly investigate the target NBFC’s history, capital structure, management efficiency, financial standing, and market reputation.

2. Goal Determination

We help you clearly define your goals, whether it’s expanding your portfolio or adding new products, and consider the financial implications of these goals.

3. Market Analysis

We assess current market conditions to inform your takeover decisions, ensuring you capitalize on market stability.

4. Financial Assessment

We evaluate your financial condition, including cash flow and liabilities, and determine the takeover amount and financing options.

5. RBI Prior Approval Compliance

We ensure compliance with RBI requirements, including securing prior approval for:

Management changes post-takeover.
Changes in shareholding resulting in a 26% acquisition or transfer.
Changes involving more than 30% of directors in the management. We also handle conditions where RBI approval is not required, such as shareholding exceeding 26% due to share buyback or capital reduction, and significant management changes post-takeover.

Document Preparation for NBFC Takeover

We assist in preparing all necessary documents, including:

Roster of proposed shareholders and board members.
Details of the origins of funds for purchasing shares.
Statements confirming the proposed shareholders are not linked to deposit-accepting entities or entities rejected by the RBI.
Declarations of clean criminal records for proposed shareholders and board members.
Bankers’ reports.
Financial statements and annual reports for the past three years.

NBFC Takeover Process: Step-by-Step Guide

Step 1: MoU Signing

We facilitate the signing of a Memorandum of Understanding (MoU), where both parties agree to the takeover terms.

Step 2: Board Meeting

We assist in scheduling and conducting an Extraordinary General Meeting (EGM) to obtain board members’ consent and address any RBI queries.

Step 3: Share Transfer Agreement

We manage the signing of the share transfer agreement between both parties.

Step 4: NOC from Creditors

We help the target NBFC secure a No Objection Certificate (NOC) from creditors, ensuring compliance with financial and loan obligations.

Step 5: Asset Transfer

We oversee the transfer of assets and funds to the target NBFC’s account as per the agreement terms.

Step 6: Company Valuation

We evaluate the company’s net present value using the Discounted Cash Flow Method.

Step 7: Notice to RBI Regional Office

We file the necessary applications with the RBI’s regional office and inform them of any post-takeover changes to avoid penalties.

Why Choose Our NBFC Takeover Services?

Navigating an NBFC takeover is a complex and compliance-intensive process. Our expertise ensures seamless business transactions by handling every step meticulously, from signing the MoU and securing creditor NOC to filing applications with the RBI and adhering to RBI guidelines. Partner with us for a smooth and successful NBFC takeover, enabling you to focus on your business growth.

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