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S&P BSE 500 Risk Free Rate (Rf)
Year Open High Low Close Market Return Year Central Government Securities
1999 1800.86 0 1791.44 n.a. Range
2000 1856.69 2485.87 1136.71 1304.66 -27.17% 2014-15 7.64 - 9.422001 1310.04 1480.99 0 1005.82 -22.91% 2013-14 7.16 - 9.402002 1006.48 1230.53 999.84 1176.73 16.99% 2012-13 7.86 - 8.822003 1178.71 2401.09 1051.6 2366.36 101.10% 2011-12 7.80 - 10.012004 2376.01 2784.8 1659.74 2779.65 17.47% 2010-11 5.98 - 8.672005 2791.56 3806.22 2534.85 3795.96 36.56% 2009-10 6.07 - 8.43
2006 3803.63 5354.58 3360.85 5270.76 38.85% 2008-09 7.69 - 8.81
2007 5269.98 8616.65 4656.9 8592.43 63.02% 2007-08 7.55 - 8.64
2008 8620.1 8991.42 2899.28 3596.85 -58.14% 2006-07 7.06 - 8.752009 3618 6872.18 2961.26 6842.25 90.23% 2005-06 6.70 - 7.792010 6839.38 8434.05 6280.99 7961.06 16.35% 2004-05 4.49 - 8.242011 7989.28 8038.74 5683.02 5778.68 -27.41% 2003-04 4.62 - 6.352012 5797.33 7627.07 5734.21 7581.57 31.20% 2002-03 6.57 - 8.622013 7613.36 7862.72 6301.27 7828.34 3.25% 2001-02 6.98 - 11.002014 7850.35 11089.32 7320.93 10721.74 36.96% 2000-01 9.47 - 11.702015 10720.05 11764.8 10354.81 11358.74 5.95% 1999-00 0.73 - 12.45
Average 20.14% Average
Risk Free Rate (Rf)
Central Government Securities
Weighted Average
8.43
8.45 Current Risk free return (on 10/12/2014) =8.36 BETA = 8.52 Average Market returns =7.92 Average Risk free returns = 7.23
7.69
8.12
7.89 21.47%7.34
6.11
5.71
7.34
9.44
10.95
11.77
8.18933333333333
Calculations For Cost Of Equity (Ke)
Ke = Rf + Beta (Rm - Rf)
0.07921.05 (taken from reuters)
0.21090.081893
Calculations For Cost Of Equity (Ke)
Discounted Cash Flow (FCFF & FCFE) of ICICI BANK LTD.
Step 1: Calculate the discount factor
Weighted Average cost of capital = We*cost of equity + Wd*cost of debt9.98%
Cost of Equity 21.47%
Step 2: Calculate FCFF and FCFE (for initial period)
Free Cash Flow to the Firm (FCFF) 2015 2016 2017
PAT 11175.355add:Depriciation/Amortization 3899.985Interest (1-Tax Rate) 38871.652
53946.992Less:Normal Working Capital 10505.5Normal Fixed Capital 0Free Cash Flow (FCFF) 43441.492 52781.412 64129.416
Free Cash Flow to the Equity (FCFE)
FCFF 43441.492less:Interest(1-Tax Rate) 38871.652Debt Repayment 1159.45FCFE 3410.39 4143.62 5034.5
Step 3: Calculate Valuation for Initial Period
Free Cash Flow For the Firm 2016 2017 2018 2019FCFF 52781.412 64129.416 77917.24 94669.44
Discounting Factor (using WACC) 0.9092 0.8267 0.7517 0.6835present value 47988.85 53015.788 58570.3893 64706.56
Free Cash Flow for valuation of firm for intial period = 224281.57
Free Cash Flow for the Equity 4143.62 5043.5 6116.92 7432.05Discounting Factor (using Equity) 0.7878 0.616 0.4834 0.3794present value 3264.34 3106.796 2956.919 2819.71
Free Cash Flow For valuation Of Equity for initial period= 12147.765
Step 4: Calculation of terminal Values
Free Cash flow to Firm (FCFF) in the 2019 94669.44Stable Growth rate 15%FCFF in 5th year 108869.85Weighted Average Cost of Capital 9.98Discount Rate - Stable Growth rate -5.02Terminal Value of FCFF -2168722.112Discounting factor in the 5th year 0.6214Terminal Value of FCFF -1347830.65
Free Cash flow to Equity (FCFE) in the 2019 7432.05Stable Growth rate 15%FCFE in 5th year 8546.85Cost of Equity 21.47Discount Rate - Stable Growth rate 6.47Terminal Value of FCFE 132099.84Discounting factor in the 5th year 0.3781Terminal Value of FCFE 49946.94
Step 5: Calculate final Valuation(Initial value + final Value
Initial Valuation Terminal Valuation
Free Cash flow to Firm (FCFF) 94669.44 -1347830.65
Free Cash flow to Equity (FCFE) 7432.05 49946.94
Discounted Cash Flow (FCFF & FCFE) of ICICI BANK LTD.
We*cost of equity + Wd*cost of debt
2018 2019 KEY CALCULATIONS & ASSUMPTIONSProfit After Tax
2015 2014 201311175.355 9810.477 8325.473
13.91 17.83 28.77%
Average profit growth rate = 21.50
77917.24 94669.44
6116.92 7432.05
Total value
-1253161.21
57378.99
KEY CALCULATIONS & ASSUMPTIONSProfit After Tax
2012 20116465.257 5151.376
25.50%
ICICI BANK LTD. Valuation by Price Earning Ratio(P/E)
ICICI BANK LTD.
Earning per share 19.68P/E Ratio 15.66
Price per share = 308.188No. of Shares(cr) 564.411Valuation by P/E ratio (cr) 173944.69
HDFC Bank Axis BankEarning per share 42.48 32.28P/E Ratio 25.73 17.97
Price per share= 1093.0104 580.071No. of Shares(cr) 240.48 227.93Valuation by P/E ratio (cr) 262847.141 132215.583
1) http://money.livemint.com/iid61/f132174/placcount/company.aspx2) http://money.livemint.com/iid61/f132187/placcount/company.aspx3) http://money.livemint.com//iid61/f100180/placcount/company.aspx4) http://money.livemint.com/iid61/f132215/placcount/company.aspx5) http://money.livemint.com/iid61/f132648/placcount/company.aspx
ICICI BANK LTD. Valuation by Price Earning Ratio(P/E)
PEER VALUATIONYES Bank IndusInd Bank
50.82 32.0816.17 29.45
821.759 944.756394.6 438.909
324266.101 414661.911
ICICI BANK LTD. Valuation by EBITDA MULTIPLE
ICICI BANK LTD.
EBITDA (Crore) 19719.91Market Capitalisation (Crore) 180035.064
EBITDA MULTIPLE 9.129
HDFC Bank Axis BankEBITDA (Crore) 17404.48 13385.438
Market Captalisation(Crore) 274728.186 137794.87
EBITDA MULTIPLE 15.78 10.29
1) http://money.livemint.com/iid61/f132174/placcount/company.aspx2) http://money.livemint.com/iid61/f132187/placcount/company.aspx3) http://money.livemint.com//iid61/f100180/placcount/company.aspx4) http://money.livemint.com/iid61/f132215/placcount/company.aspx5) http://money.livemint.com/iid61/f132648/placcount/company.aspx
ICICI BANK LTD. Valuation by EBITDA MULTIPLE
PEER VALUATIONYES Bank IndusInd Bank
3249.586 2595.959343684.53 55883.076
105.76 21.52
ICICI BANK LTD. Valuation by Asset Multiple
ICICI BANK LTD.
ASSETS (Crore) 646129.292Market Capitalisation (Crore) 180035.064
Asset MULTIPLE 0.2786
HDFC Bank Axis BankAssets (Crore) 590503.073 461932.394
Market Captalisation(Crore) 274728.186 137794.87
Asset MULTIPLE 0.465 0.298
1) http://money.livemint.com/iid60/f132174/balsheet/company.aspx2) http://money.livemint.com/iid60/f132648/balsheet/company.aspx3) http://money.livemint.com/iid60/f132187/balsheet/company.aspx4) http://money.livemint.com/iid60/f132215/balsheet/company.aspx5) http://money.livemint.com/iid60/f100180/balsheet/company.aspx
ICICI BANK LTD. Valuation by Asset Multiple
PEER VALUATIONYES Bank IndusInd Bank
136170.41 87025.931343684.53 55883.076
2.523 0.642
ICICI BANK LTD. Valuation by Market Valuation
ICICI BANK LTD.
Market Value of Debt (crore) 361562.73add: Market Value of Equity (crore) 172417.35
Less: Cash and Bank 42304.615Less: Investment 186580.035
Enterprise Value (Crore) 305095.43
HDFC Bank Axis BankMarket Value of Debt (crore) 45213.558 79758.269
add: Market Value of Equity (crore) 450795.643 322441.937Less: Cash and Bank 36331.452 36099.032
Less: Investment 166459.948 132342.832
Enterprise Value (Crore) 293217.801 233758.342
1) http://money.livemint.com/iid60/f132174/balsheet/company.aspx2) http://money.livemint.com/iid60/f132648/balsheet/company.aspx3) http://money.livemint.com/iid60/f132187/balsheet/company.aspx4) http://money.livemint.com/iid60/f132215/balsheet/company.aspx5) http://money.livemint.com/iid60/f100180/balsheet/company.aspx
ICICI BANK LTD. Valuation by Market Valuation
PEER VALUATIONYES Bank IndusInd Bank
26220.401 14761.95791175.848 60502.285
7557.152 6769.44246605.237 21562.953
63233.86 46931.847
ICICI BANK LTD. Valuation by Sales Multiple
ICICI BANK LTD.
Sales (Crore) 0Market Capitalisation (Crore) 180035.064
Sales MULTIPLE
HDFC Bank Axis BankSales (Crore) 0 0
Market Captalisation(Crore) 274728.186 137794.87
Sales MULTIPLE
ICICI BANK LTD. Valuation by Sales Multiple
PEER VALUATIONYES Bank IndusInd Bank
0 0343684.53 55883.076