The analysts at Biznexxus have the collective experience of more than 50 years of conducting due diligence in India. This experience has produced a truly refined research methodology that ensures our reports produce the X factor that the client is looking at.
Due diligence is an essential process for any company or individual looking to do business in India. However, India presents unique challenges that can make due diligence a daunting task for even the most experienced practitioners.
Challenges for Due Diligence in India
In this article, we will explore some of the challenges that due diligence practitioners face in India and why it is important to have India-specific expertise in order to conduct effective due diligence.
- One of the major challenges with due diligence in India is the multitude of regulators and tax authorities. There are over dozens of them, each publishing different data at different times. This can make it difficult for due diligence practitioners to identify the different sources for collecting information. Without the right expertise, important information could be missed, which can have serious consequences down the line.
- Another challenge is the risk associated with relying on Western database aggregators for database searches on Indian companies or individuals. While these aggregators can be useful, they only uncover Indian individuals who have been reported in English press or sanctions lists. What goes uncovered is the bulk of enforcement actions that are reported on in local languages using Indian names. This means that due diligence practitioners need to have a deep understanding of the Indian language and culture to uncover all the relevant information.
- In addition to the language barrier, the Indian political system is very complicated and virtually driven by Indian businesses. Understanding the reach of the person being searched for becomes essential. No public domain information is sufficient to show the reach of the person in politics and various businesses. This is where the nexus builder algorithm of Biznexxus can help due diligence practitioners understand the Indian subject better.
Riskpro is an independent financial research and analytics company that specializes in building the nexus between various individuals and businesses in India. They work with leading banks, PE/VC firms, consulting houses, and corporates providing company reports with rich information on many of the companies in India in a very time-efficient manner. Their database solution compiles a wealth of information about heightened-risk individuals and entities in India, making it an essential tool for any due diligence practitioner looking to do business in India.
Solutions for conducting Due Diligence in India
In the field of due diligence, it is important to have access to accurate and up-to-date information about companies and individuals. In India, the company registry information is embedded in InstaReports, a database-driven search service that provides quick access to basic company information. However, sometimes more detailed information is required, such as information about enforcement actions, regulatory actions, and money laundering activities. In addition, it is important to understand the nexus between companies and politicians, as this can have a significant impact on a company’s operations and reputation.
To address this need, Riskpro Technology offers Enhanced Due Diligence Reports, which provide a more comprehensive view of a company’s activities and relationships. These reports combine the basic company registration information from InstaReports with additional data from a suite of database-driven searches. These searches include information about enforcement actions, regulatory actions, money laundering activities, and the nexus with politicians.
While these reports are not instant, they are available within 2-3 business days. This turnaround time allows due diligence practitioners to gather the necessary information in a timely manner and make informed decisions about their business relationships.
Summary of Due Diligence in India
Having access to comprehensive due diligence reports is essential for companies operating in India, where the regulatory environment is complex and constantly evolving.
Due diligence in India presents a number of unique challenges that require India-specific expertise to overcome. It is essential for due diligence practitioners to understand the multitude of regulators and tax authorities, as well as the complexities of the Indian political system. Relying on Western database aggregators is risky, as they may not uncover all the relevant information. The use of specialized tools such as Biznexxus can help practitioners overcome these challenges and conduct effective due diligence in India.
By using Enhanced Due Diligence Reports, companies can ensure that they are making informed decisions and mitigating their risks.
