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Are you planning to take your private company public through a Reverse Merger in India? Enterslice provides end-to-end legal, regulatory, and compliance support to help you achieve a seamless, compliant transition.
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Are you thinking of taking your private company public without the long IPO wait? A reverse merger in India could be an ideal route for you. Engaging experienced professionals is highly recommended to ensure a smooth and compliant process. At Enterslice, we provide end-to-end services related to Reverse Merger in India, helping businesses understand how to go public through reverse merger in India.
A reverse merger is often an effective structure for M&A transactions involving publicly listed companies. In this process, a listed company merges with an unlisted company, resulting in a combined entity that remains publicly listed. This approach allows private companies to gain public status without undergoing a traditional IPO.
With the changing global order and ongoing economic uncertainties since the pandemic, corporations worldwide have increasingly adopted unconventional and idiosyncratic corporate restructuring scenarios for strategic and operational reasons.
Unlike traditional methods of corporate restructuring, a Private Limited Company may acquire a Public Limited Company, a Subsidiary Company may take over its Holding Company, or a company with a smaller share capital may acquire one with a larger share capital. A reverse merger offers several advantages, including economies of scale, cost reduction, entry into new markets, business diversification, and an increase in market share. Schedule a 30-min strategy call with our CAs, CS, and consultants.
Faster Cross-border Mergers
Gharwapsi Trend for Tech Firms
Around 126 Total Unicorns in India
India’s M&A Market (Double to Over USD 50 Billion by 2030)
190+ Firms Eye IPOs in India in 2026
India’s M&A Market (9.2% CAGR b/w 2025-31)
Take your private company to the public market without the complexities of a traditional IPO. A Reverse Merger in India offers a strategic, time-efficient, and cost-effective route to listing while ensuring regulatory compliance. Avoid 80% of regulatory objections with us for a reverse merger in India.
In general, the Companies Act, 2013, governs mergers under Section 230-232, outlining the legal framework for company approvals, creditor consents, and regulatory clearances. The Legal Protection Under Sections 230-232 of the Companies Act, 2013 is mentioned below.
It refers to a situation when a company wishes to restructure or consolidate its business, or when the board of directors of both merging companies approve the scheme. Further, when both the creditors and shareholders agree to the proposed merger scheme.
Section 231 of the Companies Act 2013 covers the power of NCLT in Merger Approval. Here, NCLT has the authority to approve, reject, or modify the merger scheme. It ensures compliance with shareholder and creditor interests. Moreover, the tribunal may impose conditions to protect public interest and competition laws.
This section ensures that merger schemes are fair to all stakeholders, while a valuation report and an auditor's certificate must be submitted. Further, it is mandatory to obtain regulatory approvals before completing the merger.
The list of benefits of going public through reverse merger in India is as follows:
The reverse merger offers a cheaper and faster way of accessing the stock market without an investor roadshow or looking for an IPO underwriter, while simply acquiring an under-traded (and hopefully, by extension, undervalued) company.
As compared to a private company, owning a public company reduces the burden of regulatory and compliance requirements. It provides faster access to liquidity, enhances the company’s market visibility and thus enables acquisitions by using shares as consideration. Also, public companies generally trade at higher valuations compared to private companies.
One of the key advantages of a reverse merger in India is that upon completion, the shares of the merging unlisted entity are listed on a stock exchange without the traditional process of an initial public offering (IPO). Therefore, going public through a reverse merger in India bypasses the lengthy IPO procedures, reducing overall time and compliance costs.
Company listing through M&A of listed companies through reverse mergers provides liquidity to existing shareholders of the merging unlisted entity. It may also offer an exit opportunity for financial investors who hold shares in the unlisted company.
As per the Indian securities laws, a lock-in restriction is imposed on shares of the unlisted company involved in a reverse merger with a listed entity. While a promoter’s shares, up to 20% of the post-merger paid-up share capital, are locked in for three years from the date of listing and for other shares of the merging unlisted entity that get listed, are locked in for one year from the date of listing. It is one of the merits of going public through reverse merger in India.
Typically, reverse merger in India under Companies Act, 2013 are categorized into two types:
A voluntary merger is when businesses proactively decide to merge for strategic growth, while the process for the same begins with internal approvals and legal documentation.
Compulsory mergers occur when the regulatory bodies or creditors file a petition due to financial distress. Further, the NCLT (National Company Law Tribunal) oversees the merger to protect stakeholders.
The step-by-step guide for the NCLT merger approval process is as follows:
Firstly, the applicant company shall take professional consultations from experts in order to understand the business objectives behind the proposed merger. This professional consultation also includes evaluating potential risks and legal hurdles and advising on feasibility and compliance requirements.
Secondly, draft a scheme of merger with the support of necessary documents like a valuation report, an auditor’s certificate, a list of creditors, etc. After completion, file an application with the NCLT for further proceedings with the proposal of an M&A of listed companies through reverse mergers.
In this stage, the applicant company may conduct meetings for both shareholders and creditors to secure approvals. Followed by liaising with regulatory authorities like SEBI, CCI, and ROC.
This is the last stage, which includes representation or hearing before the NCLT if required and accordingly securing a final NCLT Approval for Mergers, followed by filing with the Registrar of Companies (ROC) and completing merger execution.
Get end-to-end Reverse Merger Support covering 100% compliance.
The statutory provisions governing Reverse Takeover in India, 2026 are as follows:
Section 232(h) defines the merger between a listed and unlisted company, which results in treating the entity as unlisted; it officially becomes a listed company. This restricts immediate access to capital markets through a backdoor listing.
An approval from SEBI is a must for merging an unlisted company with a listed company, including a prior approval from the stock exchange for the scheme arrangement. While, the listed company must provide details about the unlisted company and the merger proposal to the shareholders.
Further, Shareholders of the listed company and Qualified Institutional Buyers of the unlisted company must collectively hold at least 25% of the merged entity and only unlisted companies can merge with listed entities that are listed on nationwide trading stock exchanges.
Section 72A allows the merged entity to claim accumulated losses and depreciation of a distressed company. All the assets and liabilities of the merging company must be transferred to the merged company as per the scheme. While shareholders who hold at least 90% in value of shares in the merging company must become shareholders of the merged entity.
SEBI now requires in-depth valuation and share swap reports for reverse mergers, opening the door for transparency and curbing the misuse of shell companies.
This regulation was updated in 2025. These rules mandate post-merger disclosures. It is especially for reverse mergers in the IT and healthcare sectors.
Have a look at the significant breakdown of Reverse Merger Vs IPO in India-
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With years of experience, Enterslice brings in-depth expertise in handling reverse merger in India, ensuring a seamless and compliant process for your company. Here’s why Enterslice should be your first choice for a reverse merger in India:
A reverse merger is a process where a private company becomes publicly listed by merging with a listed shell company in India, rather than going through a traditional IPO. It serves as a faster alternative to IPO in India for companies seeking access to capital markets.
In the Reverse Merger vs IPO in India comparison:
A listed shell company in India is a publicly traded company that has minimal operations or assets. Private companies often merge with these entities during the reverse merger process in India to gain listing status efficiently.
The reverse merger process in India typically includes:
You may consider a reverse merger as an alternative to an IPO in India for the following reasons:
Yes, securities regulations impose a lock-in requirement after a Reverse Merger, as mentioned below:
Companies that want to become publicly listed quickly, avoid the lengthy IPO route, or merge strategically with a listed shell company in India are ideal candidates.
Enterslice provides comprehensive guidance on the reverse merger process in India, including legal advisory, NCLT filings, SEBI compliance, and post-merger formalities, ensuring a smooth transition as an alternative to IPO in India.
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