VALUATIONS

Presented by

Chander Sawhney

What is Valuation

In general terms, valuation is determining the “tentative

worth”.

In finance, Valuation is process of estimating the FAIR VALUE of an

asset/entity.

Valuations are required in many contexts like for

M&A transactions,

FDI/Investment outside India/Transfer from Resident to NR/NR to

Resident,

Business Valuations,

PE deals,

Litigation cases (397/398),

MERCHANT BANKING

Merger Valuations

Well Developed Area

Still in developing

phase

Require more

branding , credential

s and Client Focus

Require more

branding , credential

s and Client Focus

Description of existing products

CCI Valuations CCI valuation is required when further allotment/transfer of Equity shares between a Resident and Non Resident is involved.

With increasing global transactions, CCI valuations are gaining popularity.

By grabbing this opportunity, we are providing services regarding CCI Valuation.

This area is well developed and we look further to expand more into it.

Business valuation is a very wide and a specialized area used to determine the overall value of a business/entity.

It requires understanding of practical aspects of Valuation Fundamentals, Industry Knowledge, Specific business commercial and technical operations, Valuing management integrity, Brand value i.e. value of intangibles and contingent

gains/liabilities Analysis of financial parameters like EPS, PE multiples,

EBITDA Turnover ratios, Discounted Cash Flow analysis, Debt Equity mix etc

It can be developed by us with more initiative and research with assistance of our industry research database, credentials and specific client focus.

Business Valuations

Private Equity Valuations

PE valuation is a specialized form of valuation requiring understanding of all aspects of BUSINESS VALUATION.

Our Focus should be on DEAL MAKING as a whole and not merely on IM preparation so that it becomes a source of high revenue area to our organisation.

Requirements: Strong Liaoning ability and Contacts to sell the equity

shares to possible investors Specific Client focus

Fair Opinion in Merger for In principle approval

Recent requirement of taking Fair Opinion from MB for taking 24(f) approval from Stock Exchange in case of merger between Listed and unlisted Company

ESOP Valuations

As per Rule 40C of Income Tax Rules, certification by MB for determining the FMV where the equity shares are not listed on any recognized stock exchange/in case of valuation of specified securities other than equity shares(Rule 40D)

Merchant Banking Valuations(New Avenues)

Determination of base price on BSE post restructuring in case of restructuring cases like Reduction, Revocation and Demerger

FEMA Valuations of Equity Shares in case of : Investment outside India > USD 5mn for acquisition of

Existing Foreign Company Investment outside India by Swap of shares

IPO Valuations and restructuring

Merchant Banking Valuations

There are different situations and purposes for which an asset/entity is valued (e.g. M&A, Investment-PE/FDI ,Litigation cases, misc. statutory requirements, MB Valuations etc.) Additionally at times voluntary business/equity valuations are asked for.

All valuation models and methods have their own limitations. In case of closely held companies exchange ratio is generally not an issue. However in case of merger/dilution to unrelated entities/PE Deals valuation is questioned at every stage and is practically arrived at a negotiated figure.

In all valuation models there are a great number of assumptions that need to be made and things might not turn out the way you expect. The best way out of that is to be able to explain and justify each assumption you make in light of the practical circumstances and as per the mood of the market.

..…………………………….…THANK YOU…………..……………………..

Conclusion