Due Diligence Services in India

Reviewed by Devender Kumar Malhotra, Registered Valuer (IBBI) — Sapient Services Pvt. Ltd.  |  Last updated: September 2026

A due diligence review is usually asked for at the point a deal, investment, or loan is close to being decided, and someone needs to confirm the numbers and the paperwork hold up before it goes ahead. Sapient Services runs these engagements for corporates, banks and NBFCs, PE and VC investors, and foreign companies entering the Indian market, led by Chartered Accountants, IBBI-registered valuers, and sector specialists. Financial, legal, tax, operational, and technical review run as one coordinated engagement rather than separate exercises handled by different vendors — useful on its own, and necessary when a business has operations, licences, or assets spread across more than one state.

What Due Diligence Actually Checks

Due diligence is a structured review of a company’s financial, legal, tax, and operational position, carried out before an acquisition, investment, or lending decision. An audit gives assurance on historical financial statements against accounting standards; due diligence investigates the specific risks a transaction carries, which is a different exercise even when some of the same documents get pulled. Our guide on what due diligence covers goes into the concept in more depth.

Who Needs Due Diligence Services in India

• PE and VC firms assessing a target or portfolio company before committing capital.
• Banks and NBFCs running credit checks ahead of a lending decision.
• Corporates on either side of an M&A deal, from initial scoping through to closing.
• Foreign companies acquiring or investing in an existing Indian business.
• Listed companies needing an independent review ahead of a capital raise or transaction.
• Startups preparing for a fundraise who want issues flagged before investor diligence begins.
• Real estate developers and investors, particularly where a deal spans more than one state.

Types of Due Diligence We Cover

Most transactions draw on more than one of these at once. A mid-size acquisition typically needs financial, legal, and tax review at minimum; technical, property, or cross-border elements get added depending on the deal.

Financial Due Diligence

Tests whether earnings and cash flow are sustainable, not just correctly recorded — normalised EBITDA, working capital movement, debt structure, and contingent liabilities, often summarised as a quality-of-earnings view.

Legal Due Diligence

Contracts, litigation, statutory registers, and compliance checked against whichever regime the relevant state or sector applies.

Tax Due Diligence

Direct and indirect tax exposure, transfer pricing, and pending assessments, reviewed against the Income Tax Act, 2025 for periods after 1 April 2026 and the 1961 Act for earlier periods — the two frameworks now sit side by side depending on which tax year is in question.

Operational and Technical Due Diligence

Supply chain, internal controls, and technology infrastructure, assessed against whether the business can run at the scale it’s being valued on.

Property Due Diligence

Title, encumbrances, and — where a real estate project falls under it — RERA registration status.

Commercial Due Diligence

Market position and customer concentration, tested against the specific market the business competes in rather than a national average.

Vendor and Third-Party Due Diligence

Counterparty risk and background checks, including MCA/ROC searches that follow a promoter’s other companies.

How We Support Different Transactions

Due diligence looks different depending on which side of the deal it’s run for.

• Buy-side due diligence. Run for the acquirer or investor, before terms are finalised, to confirm what’s being bought matches what’s being represented.
• Sell-side (vendor) due diligence. Run by the seller in advance, so issues get fixed or disclosed before a buyer’s own team finds them mid-negotiation, which is usually where deals lose momentum.
• Lender due diligence. Pre-sanction credit review for banks and NBFCs, focused on repayment capacity and existing charges rather than valuation.
• Closing review. Confirms that conditions agreed at signing — regulatory approvals, consents, pending litigation resolution — are actually satisfied before the deal closes.

Our Due Diligence Process

What to Have Ready Before Due Diligence Starts

• Audited financial statements and MCA/ROC filings for every entity involved.
• Material contracts with customers, suppliers, and lenders.
• Tax records including GST returns and any pending notices.
• Board minutes and resolutions.
• Property records where land or built assets are part of the deal.

Having these organised in advance is one of the bigger factors in how long a review actually takes.

What Drives the Cost

Due diligence fees are scope-based rather than fixed. The main drivers:

For an actual quote, the scope needs discussing directly — the table above explains what moves the number, not what the number is.

How to Choose a Due Diligence Company in India

• Check who’s actually on the team. Chartered Accountants for the financial and tax work, IBBI-registered valuers where valuation is involved — not a generalist consultant handling everything.
• Ask how confidentiality is handled. An NDA should be signed before any document changes hands, with access restricted to the assigned team.
• Look for one report, not three. A credit committee, an investment committee, and deal counsel should be able to work off the same document without a separate clarification round.
• Confirm multidisciplinary coverage under one engagement. Coordinating financial, legal, tax, and technical review across separate vendors adds time and reconciliation work that a single engagement avoids.
• Match the firm to the transaction type. A PE/VC investment review, a lending-related credit check, and an M&A deal each need a slightly different focus — ask whether the firm has actually run that type before.

Why Work With Sapient

• A multidisciplinary team — Chartered Accountants, IBBI-registered valuers where valuation work is required, cost accountants, and engineers — so financial, technical, and property due diligence run together instead of across separate vendors.
• Reports built to be used by more than one audience at once: a credit committee, an investment committee, and deal counsel, without a separate re-verification round.
• Confidentiality arrangements documented for every engagement, with client information restricted to the assigned team.
• Headquartered in Okhla Phase II, New Delhi, with engagements run across multiple Indian states.

Common Mistakes to Avoid

• Starting fieldwork before the NDA is signed. Both sides typically want this locked down first, given the sensitivity of what gets shared.
• Treating due diligence and an audit as the same exercise. An audit gives assurance on financial statements; due diligence investigates deal-specific risk, and asking the wrong one for the job wastes a review cycle.
• Skipping a scoping call. Jumping straight to a full engagement without agreeing which disciplines actually apply tends to cost more than it saves.
• Checking only the registered office on a multi-location business. Compliance gaps and undisclosed charges tend to sit at branches and plants, not head office.
• Ignoring the tax-year boundary. Reports covering periods before and after 1 April 2026 need to cite the correct Act for each period.

FAQs

Q1. How is due diligence different from an audit?

An audit gives an opinion on whether financial statements comply with accounting standards. Due diligence is investigative and deal-specific — it asks whether the transaction itself makes sense and what risk the client is taking on.

Q2. Is due diligence legally required for M&A in India?

Not by statute in most cases, but it’s standard practice — findings directly inform valuation, deal structure, and the representations and warranties written into the agreement.

Q3. How long does a due diligence engagement take?

It depends on the number of entities, locations, and disciplines in scope, and how ready the target’s documents are.

Q4. What’s the difference between buy-side and sell-side due diligence?

Buy-side is run for the acquirer to verify what’s being bought. Sell-side is run by the seller beforehand, to surface and fix issues before a buyer’s team finds them during negotiation.

Q5. Who actually conducts due diligence in India?

Typically a mix of Chartered Accountants, IBBI-registered valuers, and sector specialists, depending on which disciplines the transaction needs.

Q6. What documents does a target company need to have ready?

At minimum: audited financials, MCA/ROC filings, material contracts, tax records, and board minutes for every entity and location involved.

Q7. Does due diligence cost more for a multi-state deal?

Generally yes, since each additional location adds document collection and fieldwork. The exact number depends on scope, not the number of states alone.

Q8. Can due diligence happen before a term sheet is signed?

Yes — a preliminary review is common before terms are agreed, with a fuller review following once both sides confirm they want to proceed.

Q9. How do I choose between a few due diligence firms?

Compare team credentials, confidentiality practice, and whether they’ve actually handled your specific transaction type before, not just their fee quote.

Q10. Is due diligence worth it for a smaller, single-state deal?

Yes, though the scope is usually lighter — financial records, legal standing, and basic compliance, without the full multi-location depth a larger deal needs.

Before You Start

If a deal, fundraise, or lending decision spanning more than one state is coming up, the first useful step isn’t a full engagement — it’s a scoping call. Share the entities, locations, and transaction scope, and work out which disciplines actually apply before agreeing on cost or timeline.

Write to valuation@sapientservices.com or call +91 9540162888.