Deal Structuring
Working Capital Peg
A pre-agreed "normal" working capital target built into the purchase price, with a rupee-for-rupee post-closing adjustment if actual closing working capital deviates.
Buyer Example
Buyer acquiring a Pune industrial fasteners manufacturer sets the peg at ₹6 Cr based on trailing 12-month average. Closing working capital comes in at ₹5.2 Cr, triggering an ₹80 Lakh purchase price reduction — protecting the buyer from a seller who strips inventory or accelerates receivables collection right before closing.