New Delhi: Despite the US Federal Reserve’s tightening cycle dampening global capital flows into emerging markets, inbound M&A activity in India continues with nuanced deal structuring innovations. “Conventional instruments like convertible preference shares with coupons remain popular, now more carefully designed within FEMA compliance frameworks,” said Zia Mody, founder and managing partner at AZB & Partners.
In an exclusive interview with ETLegalworld, Mody said there is growing adoption of share swaps and increased interest in reverse mergers, where foreign companies re-domicile to India. This process has been simplified recently due to a more facilitative Reserve Bank of India (RBI) stance, signaling a positive shift for cross-border deals.
She observed that the US tariffs under the Trump administration and ongoing tariff negotiations are still evolving, with India maintaining a pragmatic approach balancing trade partnership with sovereignty. Meanwhile, UK-India Free Trade Agreement talks focus on broader opportunities beyond headline issues like motorcycle or wine tariffs.
“Environment, Social, and Governance (ESG) factors have become integral to M&A due diligence, especially for listed firms where governance (‘G’) leads compliance, while environmental and social elements are gradually gaining traction,” said Mody.
