Unlock Growth Potential with a Seamless NBFC Takeover
Our team of experts offers seamless, end-to-end NBFC takeover solutions designed to make your expansion into India smooth and strategically sound. We ensure every step is compliant, efficient, and aligned with your business goals, enabling you to excel in one of the world’s most dynamic financial markets.
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NBFC Takeover?
An NBFC takeover simply means an acquirer NBFC (the NBFC which wants to take over) purchases the target NBFC (an already existing RBI-registered NBFC). After the takeover, all the assets, liabilities, shares, etc., of the target NBFC will belong to the acquirer NBFC.
However, in certain cases, an NBFC may also consider surrendering its NBFC license if it no longer wishes to operate within the regulatory framework, or if the business model has changed significantly. Surrendering an NBFC license must be done in accordance with RBI regulations to ensure there are no outstanding liabilities or compliance issues.
Why Opt for an NBFC Takeover?
With credit demand at an all-time high in India, acquiring a pre-registered RBI-approved NBFC offers an efficient route to enter or expand in the financial sector. The streamlined takeover process, now simplified by the Reserve Bank of India, allows you to bypass complex registration and gain immediate market access in just 50-65 days.
Quick Market Entry:
Establishing a new NBFC is lengthy and requires extensive approvals. An acquisition enables instant market access with a fully licensed entity.
Pre-Approved Licenses:
Avoid licensing challenges by inheriting all existing approvals with an established NBFC.
Operational Framework:
Start with experienced teams, infrastructure, and an existing client base.
Diversification Opportunities:
Expand into lending, investment, or other financial services by acquiring a licensed NBFC.
Regulatory Compliance:
Leverage NBFC's compliance history to ensure smooth, regulation-aligned operations.
Things to Consider:
- Background Verification: To assess potential impacts on your business, a thorough check needs to be done on the target NBFC’s history, capital structure, and management efficiency.
- Goal Setting: The acquirer NBFC should define its financial objectives for the acquisition and ensure alignment with the target NBFC’s capabilities.
- Market Exploration: The acquirer entity should review available acquisition opportunities to make an informed decision.
- Financial Stability: Should assess one’s financial readiness and the target’s financial position to optimize your acquisition strategy.
Checklist of documents for NBFC takeover
Acquiring an NBFC involves several critical steps that must be executed with precision. Here’s a step-by-step breakdown of how we guide you through the entire process:
Detailed information on the individuals who will be shareholders and board members after the takeover.
A comprehensive statement of the sources of funds that proposed shareholders will use to acquire the NBFC shares.
- A declaration from each proposed shareholder and director stating they are not associated with any deposit-taking entity.
- An additional declaration that they are not affiliated with any entity previously rejected by the RBI.
All proposed shareholders and directors signed statements confirming they have no criminal convictions or background and that they qualify under Section 138 of the Negotiable Instruments Act.
A banker’s report for each proposed shareholder and director.
The NBFC’s financial statements and annual reports for the past three years.
Our Expertise in NBFC Takeover: A Tailored Approach
With over 15 years of industry experience, NBFC Advisory has a team of seasoned professionals dedicated to simplifying the acquisition process. Our comprehensive services include:
Comprehensive Due Diligence
Before proceeding with any acquisition, understanding the target company’s financial health, regulatory compliance, and operational integrity is crucial. Our team conducts thorough due diligence, examining:
- Financial Statements: Ensuring the target NBFC’s financial records are accurate and up to date.
- Compliance History: Reviewing the company’s history of compliance with RBI regulations to identify any potential risks.
- Outstanding Liabilities: Identifying any unresolved liabilities, pending litigations, or regulatory penalties.
- Asset Quality: Analyzing the quality of assets and receivables on the NBFC’s books to ensure a sound acquisition.
Expert Transaction Structuring
Our team ensures that every acquisition is structured to maximize your benefits while minimizing risks. We work with you to:
- Negotiate Terms: Ensuring you get the best value for the acquisition.
- Optimize Tax and Legal Aspects: Structuring the transaction to ensure compliance with Indian tax laws and regulations while optimizing tax benefits.
- Risk Mitigation: Identifying and mitigating any risks involved in the takeover process.
End-to-End Regulatory Assistance
Sailing India’s regulatory system can be complex, but we handle the entire RBI approval process on your behalf. This includes:
- Filing of Applications: We prepare and file all necessary applications and documentation with the RBI.
- RBI Approvals: We coordinate with regulatory authorities to secure timely approvals for the transaction.
- Ongoing Compliance: Post-acquisition, we provide advisory services to ensure ongoing compliance with RBI and other regulatory requirements.
Seamless Post-Takeover Integration
Acquiring an NBFC is just the beginning. Our team helps you integrate the acquired NBFC into your existing business seamlessly. This includes:
- Management Transition: Assisting with leadership changes and management restructuring to ensure continuity.
- Operational Alignment: Aligning the acquired NBFC’s operations with your business goals and objectives.
- Policy and Framework Updates: Updating internal policies to reflect the new ownership structure and regulatory requirements.
What is NBFC Takeover
What Are the Advantages of Taking Over an NBFC?
The following is the need for NBFC Takeover:-
- Mergers and acquisitions are common in the global business sector.
- These talks and stipulations influence NBFCs, which are being viewed as an addition to the concerned bank.
- The Reserve Bank of India has established a framework for NBFC takeovers. The purchase of NBFC by another firm is referred to as an acquisition.
- Only registered NBFCs are allowed to assume control of other NBFCs.
What are the Negative Consequences of an NBFC Takeover?
NBFC Takeover provides advantages for both the acquirer and the target company. The following are the details:
- Target’s earnings have increased.
- The level of competitiveness has decreased.
- Increased revenue production or sales.
- Scale economies are a type of economy that occurs when many people work
- A distribution network’s expansion.
- Mergers and acquisitions are common in the global business sector.
- These talks and stipulations influence NBFCs, which are being viewed as an addition to the concerned bank.
- The Reserve Bank of India has established a framework for NBFC takeovers. The purchase of NBFC by another firm is referred to as an acquisition.
- Only registered NBFCs are allowed to assume control of other NBFCs.
NBFC Takeover provides advantages for both the acquirer and the target company. The following are the details:
- Target’s earnings have increased.
- The level of competitiveness has decreased.
- Increased revenue production or sales.
- Scale economies are a type of economy that occurs when many people work
- A distribution network’s expansion.
What documentation is required for an NBFC takeover?
To Takeover any existing NBFC, permission from the Reserve Bank of India is required. The following are the documents that are necessary for the Takeover:
- Material of the potential shareholders’ sources of funds, which are needed for the acquisition of NBFC shares;
- Information on the proposed Board of directors or shareholders;
- Every proposed director or shareholder must sign a declaration saying that they are not affiliated with any entity that the RBI has denied;
- A statement from each potential director or shareholder stating that they are not affiliated with any entity that accepts deposits.
- Furthermore, all proposed shareholders or directors must provide a report under section 138 of the Negotiable Instruments Act qualifying their non-criminal and non-convicting backgrounds.
- All submitted directors/shareholders’ bankers’ reports.
Why NBFC Advisory?
Accelerated, Hassle-Free Process:
Experience a quicker, stress-free acquisition with our refined approach, coordinated documentation, and expert regulatory support, paving the way for swift market entry.
In-Depth Expertise and Industry Insight:
Leverage our 15 years of experience in NBFC advisory. Our seasoned team helps you navigate intricate regulations, assess risks, and implement proven strategies for a successful takeover.
Customized Acquisition Solutions:
We recognize that every acquisition is distinct. We tailor our approach to align with your business objectives, ensuring a seamless transition with minimized risks.
Attention to Detail:
Rely on NBFC Advisory’s skilled professionals to manage every takeover aspect meticulously, allowing you to proceed confidently, knowing the complexities are expertly handled.
Before NBFC Advisory
- Time-consuming, stressful acquisition process
- Confusion over complex regulations and requirements
- Risk of costly errors and missed approvals
- Unforeseen issues and penalties
- Overwhelmed by coordination with multiple agencies
After NBFC Advisory
- Fast, streamlined acquisition with expert support
- Clear guidance through takeover steps
- Accurate, coordinated documentation for faster approvals
- Thorough risk assessment to secure a safe investment
- Efficient communication with authorities, ensuring smooth progress
Why Choose NBFC Advisory for Your NBFC Takeover?
With over a decade of experience in NBFC advisory, financial services, and regulatory compliance, we provide a one-stop solution for businesses looking to expand through NBFC acquisition. Here’s why clients choose us:
Proven Track Record :
We’ve successfully managed NBFC takeovers across multiple industries, ensuring compliance and a smooth transition every time.
Industry Expertise :
Our team of financial, legal, and regulatory experts brings unparalleled knowledge to every transaction.
Customized Solutions :
We understand that every business is different, which is why we offer tailored takeover solutions to meet your unique objectives.
End-to-End Support :
JFrom initial consultation to post-acquisition integration, we guide you through every stage of the NBFC takeover process.
Client-Centric Approach :
We pride ourselves on building long-term partnerships with our clients. Your success is our priority.
Client Success Stories
Kickstart your NBFC takeover ambitions with Us!
Our mission is to Make it Count. An NBFC takeover offers a powerful opportunity to expand and boost market share. However, a single misstep can have serious consequences. That’s why partnering with seasoned experts is essential, guiding you through RBI requirements to ensure a smooth, compliant transition.
Get started on your NBFC Takeover right now!!
Simplifying Regulations, Empowering Growth
FAQs
Any change in an NBFC’s shares of more than 26% or a change in management of more than 30% shall be regarded as a takeover of the NBFC.
The NOD must acquire RBI’s permission before changing management, transferring shares, or selling an NBFC.
To seek an NBFC license, you must have a minimum fixed deposit of Rs. 2 crore, according to RBI. This is also known as net owned fund or starting capital. After receiving RBI approval for an NBFC license, you can use the funds from your fixed deposit to lend or engage in any other pre-approved business activity.
To change your name, you must first receive a name availability certificate from the MCA, and then apply for a NOD from the RBI. Once you have received NOD, you can begin the process of changing your name.
With our streamlined approach and the simplified procedures by the Reserve Bank of India, the takeover process typically takes 50 to 65 working days, allowing for rapid entry into the financial market.
Yes. You must have a CIBIL score of 700 or above and have had no disputes or loan write-offs with banks or NBFCs in the previous 24 months.
If you have any further questions or need additional information, feel free to contact us through our contact form. Our team will be happy to assist you!
