ESOP Due Diligence Prep for Funding and M and A in Pune

Picture a product team in Rajiv Gandhi Infotech Park, Hinjewadi: bootstrapped for four years on services revenue, an option pool added by a quick board note when the first key hires landed, then a SaaS pivot and a term sheet from a domestic fund. The day the data room opens is the day the board-only approval, the un-filed MGT-14 and the SH-6 register that nobody touched after FY23 all become the investor's problem, and yours. Patron Accounting reverses that sequence: we audit and remediate the ESOP record in Pune before the fund's auditor ever logs in.

This is sell-side, not buy-side, work. We are not checking the company for an investor; we are getting your own equity paperwork through RoC Pune and into a clean cap table so that diligence on a Kharadi or Magarpatta round becomes a verification step, not a re-pricing event. The pattern repeats across the city, from EON IT Park startups to Chakan-MIDC manufacturers who scaled the plant faster than the secretarial file, and it is far cheaper to cure on your own clock than under a closing deadline.

Whether the fund's counsel is reviewing an EON IT Park SaaS company or a Baner deep-tech team, the ESOP request list is short and the same four checkpoints decide the outcome. Get these straight and the rest of diligence flows:

• The approvals: did a special resolution approve the scheme, and was MGT-14 filed in time?
• The register: is the SH-6 register complete and current, with every grant, vesting, exercise and forfeiture?
• The valuations: is there a registered-valuer FMV at grant and at each exercise, and are past allotments supported?
• The reconciliation: does the cap table tie exactly to the statutory registers, the resolutions and the grant letters?

Across the Pune rounds we have prepped, the findings cluster in a predictable way: services-first firms in Hinjewadi and Magarpatta tend to trip on the resolution and the SH-6, while product startups in Kharadi and Viman Nagar that have already run an exercise window tend to trip on PAS-3, valuation and the cap-table tie-out. Here is the full red-flag list a reviewer works through.

One Pune engagement, run end to end from audit to data room. We carry the RoC Pune filings, the registered-valuer coordination and the cap-table maths so your founders can stay on the round itself.

• ESOP compliance audit: we review the scheme, resolutions, MGT-14 and PAS-3 filings, the SH-6 register, valuation history and grant letters against the DD checklist.
• Cap-table reconciliation: we reconcile the cap table to the statutory registers, board resolutions and grant records, resolving every discrepancy.
• Filing remediation: we file missing MGT-14 and PAS-3 returns, manage the late fees, and regularise defective approvals.
• Valuation clean-up: we obtain the missing registered-valuer FMV reports for grants and exercises and address historic valuation exposure.
• Data-room pack: we assemble a clean, indexed ESOP data-room pack, so diligence is fast and the answers are ready.

The recurring pain points for a Pune founder are time and history, a short closing window against years of informal option paperwork, and a RoC Pune backlog to plan around. Here is how each plays out and how we contain it.

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Professional service charges for drafting, filing, and representation are separate from the statutory fees. The exact fee depends on the complexity of the case, disputed amount, and number of hearings required. Contact us for a detailed quote.

Get a free ESOP Due Diligence Prep consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

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Patron Accounting LLP is a CA and CS firm with 15+ years on ESOP compliance, ROC filings, valuations and deal-readiness for funding and M and A.

From our Pune base we work with founders across Hinjewadi, Magarpatta, Kharadi, Viman Nagar and the Baner-Balewadi corridor, and with offices in Mumbai, Delhi and Gurugram we serve businesses across India, both in-person and remotely.

Every gap maps to a defined fix, most of them routed through RoC Pune. We work the list in priority order so the items that block the cap-table tie-out for your Hinjewadi or Kharadi data room are closed first.

The statute is national, but for a Pune company every filing and condonation under it runs through RoC Pune on MCA21. The provisions that govern an ESOP remediation are:

Approval and filing: an ESOP scheme requires a special resolution under Section 62(1)(b), with MGT-14 filed within 30 days and PAS-3 on allotment after exercise; missing or late filings are the most common DD findings.

Register: Rule 12(10) requires the SH-6 register recording all grants, vesting, exercise, lapse and forfeiture, which must be available for inspection in diligence.

Valuation: a registered-valuer fair value is required at grant and at exercise, and past allotments without a Rule 11UA valuation can carry historic Section 56(2)(viib) exposure.

Remediation routes: late filings are regularised with the applicable late fees, and where needed condonation or compounding routes under the Companies Act address older defaults.

Authoritative sources: the Ministry of Corporate Affairs (Section 62, Rule 12, MGT-14, PAS-3, SH-6), the Companies Act, condonation and compounding provisions, and the Income Tax Department (Rule 11UA valuation, Section 56).

Pune companies file at RoC Pune, the Maharashtra registrar that also covers the rest of western Maharashtra, so every retrospective MGT-14, PAS-3 and SH-6 remediation we run for a Pune company is processed through that office. Knowing the local registrar's turnaround on condonation and late-filing matters helps us sequence the clean-up against a live deal clock.

The option-hygiene problems we see vary by cluster:

• Hinjewadi and Magarpatta IT parks: services-led companies that bolted an ESOP pool on late, often with board-only approval and no special resolution before the first grants went out.
• Kharadi and Viman Nagar startup hubs: VC-backed product startups raising Series A or B where the cap table in the data room does not tie to the SH-6 register after a couple of exercise rounds.
• Baner-Balewadi tech corridor: deep-tech and engineering startups with FMV done only at scheme setup, missing the Rule 11UA valuation at each exercise window.

Because most Pune rounds are led by domestic and global funds running a four-to-eight-week diligence after the term sheet, starting the ESOP prep the moment the term sheet lands is what keeps a Hinjewadi or Kharadi deal on its agreed timeline and valuation.

This is the one ESOP service where the clock is already running: the term sheet is signed, diligence is days or weeks away, and the gaps that took years to accumulate have to be fixed in that window. Every day of delay narrows the room to remediate cleanly and raises the chance that the investor finds the gap first, on their terms. The moment a round or a sale is on the horizon, get the ESOP records audited and fixed, so diligence confirms a clean house rather than uncovering a messy one.

ESOP gaps are silent until diligence, and then they are loud, costing valuation, time and sometimes the deal. Preparing in advance turns that risk into a non-event.

Patron Accounting LLP, a CA and CS firm with 15+ years of ESOP and deal-readiness experience, audits your scheme, filings, registers, valuations and cap table against what investors check, remediates every gap, and hands you a clean ESOP data room, so your funding round or acquisition closes on time and at the value you agreed.

Start with the national ESOP Due Diligence Prep for Funding and M&A service, then explore complementary ESOP services across India.

• ESOP Due Diligence Prep for Funding and M&A in India - the national parent service
• ESOP Services Hub - the full ESOP advisory hub - route by stage, scenario or tax
• ESOP Scheme Design - design the option pool, vesting schedule and leaver terms
• ESOP Valuation Services - Rule 11UA fair-market-value reports for grants and exercises
• ESOP Corporate Filings - MGT-14, PAS-3 and Form SH-6 register filings
• ESOP Perquisite Tax (Sec 17(2)(vi)) - perquisite tax and TDS computation at exercise

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