Rollover Equity In India: How PE Sponsors Should Structure Seller Rollovers

Seller rollover is a familiar feature of private equity deals. In a typical US sponsor-led acquisition, the seller takes most of the price in cash and reinvests the balance in the post-acquisition business. The seller keeps exposure to future upside, and the sponsor keeps continuing shareholders aligned with the new owners.

When the selling shareholder is resident in India, that simple proposition sits on a far more complex legal structure. “Rollover” is a commercial label, not a legal mechanism. Depending on the deal, it can mean retaining existing shares, subscribing for new shares, a share swap, an investment into an acquisition vehicle, or a mix of these. Each route triggers a different set of Indian corporate, foreign exchange, tax, valuation, accounting, depository and secretarial requirements.