The Role Of AI And Technology In Transforming M&A Due Diligence In India
Doing deals in India—like buying or merging companies—used to be a long and messy process. Imagine a team of analysts, heads buried in stacks of financial reports, trying to manually reconcile years of data. Or lawyers, squinting at endless pages of contracts, searching for hidden clauses that could cost millions. It took forever, and mistakes were easy to make. Especially here, with all the different rules and ways businesses work across the country.
But things are changing, and it’s mostly thanks to smart tech like AI. Instead of people spending months going through papers, computers can now do a lot of the heavy lifting. Imagine a mid-sized company is being acquired. Instead of manually reviewing thousands of invoices and sales records, an AI-powered system scans these documents, extracts key financial data, and flags any inconsistencies. For example, the system might detect a sudden surge in sales to a newly registered, unknown vendor, raising a red flag for potential fraud.
It’s not just about the money, though. Legal stuff is a big headache too. Reading through all those contracts? AI can do that now. For example, during an acquisition, AI can analyze software licensing agreements, identifying any clauses that grant third-party rights to crucial intellectual property. And in India, where land ownership can be complicated, imagine a real estate firm buying a large land parcel. Tech helps check those records, using geospatial data and digital land records to verify ownership and identify any encumbrances, far more efficiently than a human team could.
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Smarter Checks, Safer Deals: Using AI to Get it Right
Even checking out how a company works is getting easier. Instead of sending people to every factory or office, we can use computers to look at their numbers and see how well they’re doing. Drones can even take pictures and videos of places, so we don’t have to travel as much. For example, imagine a manufacturing conglomerate acquiring a factory. AI analyzes production line data, identifying bottlenecks and inefficiencies that a physical inspection might miss. Drones then capture high-resolution images of the factory floor, pinpointing potential safety hazards or maintenance issues.
And instead of having rooms full of paper, we’re using online “rooms” that are super secure. For instance, an acquisition happens for a pharmaceutical company. Their intellectual property and research data are stored in a virtual data room (VDR). AI helps tag and categorize documents, enabling lawyers and scientists to quickly find the information they need. Advanced security protocols ensure that only authorized personnel can access sensitive data. This means safer deals, and fewer mistakes because information is easier to access and analyze.
Some companies in India are already using this tech. Big banks are using AI to check loan portfolios when they buy another bank. And when companies buy big infrastructure projects, they’re using drones to look at land and buildings.
The Future of Deals: What’s Next for India’s M&A Scene?
Of course, it’s not all easy. We need to make sure people’s information is safe, and we have to follow all the rules. And not everyone knows how to use this tech yet. Imagine a small family-owned business wanting to be acquired. They may not have the resources to implement advanced AI tools.
If we want to do this right, we need to keep our data safe, make sure the tech works with our old systems, and teach people how to use it. Companies might need to invest in training programs, or partner with tech firms to implement these solutions.
Looking ahead, things are only going to get smarter. We’ll have even better AI, and maybe even things like blockchain to make deals safer. Imagine blockchain being used to verify the authenticity of land records, or to track the provenance of goods in a supply chain, reducing fraud. The government will need to make some rules about how we use all this tech, especially regarding data privacy and cybersecurity.
Basically, AI and tech are making deals in India faster, more accurate, and less stressful. If companies want to stay ahead, they need to start using these tools. It’s changing the way business is done!
King Stubb & Kasiva,
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