Valuation & Financial Re-organization
This document provides contact details for valuation services at IndiaCP and outlines an upcoming business leadership program on valuation. It discusses what valuation is, key concepts like value vs price and the difference between transactions and valuations. It covers standard valuation approaches like income, asset and market approaches. It also discusses valuation methodologies, factors considered, and regulatory contexts where valuation is required in India like for the Reserve Bank of India, Income Tax, and SEBI.
Mr. Chander Sawhney, Partner & Head – Valuation & Deals, Corporate Professionals shared his thoughts as a guest Speaker on M&A Valuation and challenges at a Business Valuation Masterclass organised by VC Circle on 31st August, 2016. Corporate Professionals acted as the event supporting partner.
• In case of a merger valuation, the emphasis is on arriving at the relative values of the shares of the merging companies to facilitate determination of the swap ratio, hence, the purpose is not to arrive at absolute values of the shares of the companies. The key issue to be addressed is that of fairness to all shareholders. There are established legal precedence for merger valuation methodologies:
• Valuer’s role is to incorporate case specific factors and use appropriate methodologies so as to determine a fair ratio
• Usually, best to give weight ages to valuation by all methods
• Market price method and Earnings methods dominate.
• It is observed that in case of M&A, the Valuations depart from the concept of “Fair Value” as elements like Distress Sale, Desperate Buy, Comparable Transaction Multiples come into play reflecting Price than Value.
About Corporate Professionals Valuation Practice
Corporate Professionals Capital Pvt. Ltd. is a SEBI Registered (Cat-1) Merchant Banker and has a successful track record of providing a broad range of M&A and Transaction Advisory Services. Our Dedicated Team has more than 10 years of rich Valuation experience and we have executed more than 500 Corporate Valuations for clients of International Repute across different Context, Industries and Boundaries.
To know more about Our Valuation offerings and how we can help you, please visit us at www.corporatevaluations.in or download our Valuation profile @ http://www.corporatevaluations.in/VALUATION_PROFILE.pdf
Introduction to Business Valuation, Fair Market Value, reasons and elements of business valuation, methodologies of business valuation, case study on net asset value.
Mr. Chander Sawhney, Partner & Head – Valuation & Deals, Corporate Professionals shared his thoughts as a guest Speaker on Valuation Principles & Techniques in Ind AS at a seminar organised by Gurgaon Branch of ICAI on 3rd September, 2016.
IndAS113 prescribes Fair Valuation definition, Techniques, Application and its Hierarchy. About 75% of the Balance Sheet Size is expected to change due to Fair Value Accounting (#IndAS109 #Financial Instruments, #IndAS102 #Share based payments, #IndAS16 Property Plant Equipments (PPE), #IndAS103 #Business combination etc. shall be impacted using #FairValue. Time to get ready, Plan Prepare and Align with the new requirements...
About Corporate Professionals Valuation Practice
Corporate Professionals Capital Pvt. Ltd. is a SEBI Registered (Cat-1) Merchant Banker and has a successful track record of providing a broad range of M&A and Transaction Advisory Services. Our Dedicated Team has more than 10 years of rich Valuation experience and we have executed more than 500 Corporate Valuations for clients of International Repute across different Context, Industries and Boundaries.
To know more about Our Valuation offerings and how we can help you, please visit us at www.corporatevaluations.in or download our Valuation profile @ http://www.corporatevaluations.in/VALUATION_PROFILE.pdf
Mr. Chander Sawhney, Partner & Head – Valuation & Deals, Corporate Professionals shared his thoughts as a guest Speaker on Relative Valuation - Techniques & Application at a Business Valuation Masterclass organised by VC Circle on 31st August, 2016.
Relative Valuation in which value of an asset or liability is done by comparing it to its Peers is pervasive and preferred for ascertaining Fair Value at a point of time as it reflects the market positioning of the Industry and Peers at that time. While Discounted Cash Flow (DCF) method is applied for arriving at Fundamental Valuation, most M&A transaction are based on Relative Valuation multiples (mostly Earnings based). The valuation ratio typically expresses the valuation as a function of a measure of Key Financial Metrics like PE, EV/EBITDA, EV/Sales or Book Value Multiple.
But before using a multiple, one should know the fundamentals determining the multiple and how changes impact it. Sanity check through use of fundamental valuation method like DCF is strongly recommended.
About Corporate Professionals Valuation Practice
Corporate Professionals Capital Pvt. Ltd. is a SEBI Registered (Cat-1) Merchant Banker and has a successful track record of providing a broad range of M&A and Transaction Advisory Services. Our Dedicated Team has more than 10 years of rich Valuation experience and we have executed more than 500 Corporate Valuations for clients of International Repute across different Context, Industries and Boundaries.
To know more about Our Valuation offerings and how we can help you, please visit us at www.corporatevaluations.in or download our Valuation profile @ http://www.corporatevaluations.in/VALUATION_PROFILE.pdf
Company Valuation PowerPoint Presentation Slides SlideTeam
Get ready-made Company Valuation PowerPoint Presentation Slides to analyse all the profit and net value your business has made. Conduct a thorough evaluation of a company’s management, capital structure, future earning prospects, and more with the help of professionally designed company valuation PPT presentation templates. Determine the current worth of a business and assess all aspects of a business. This deck comprises of several company valuation PowerPoint templates like valuation methodology, valuation steps, company valuation methodologies, determining free cash flow, valuation results, business due-diligence process, strategic due-diligence methodology, and more. Incorporate business valuation PowerPoint slideshow to estimate the selling price of the business. Use business valuation methods PowerPoint techniques for valuing a business asset such as cost approach, cost to build, replacement cost, market approach, discounted cash flow, forecast future cash flow, etc. Grab access to the company valuation complete PowerPoint deck for a business analysis. Employ a few jocular expressions with our Company Valuation Powerpoint Presentation Slides. It helps insert a bit of humor.
Mr. Chander Sawhney, Partner & Head – Valuation & Deals, Corporate Professionals shared his thoughts as a guest Speaker on M&A Valuation and challenges at a Business Valuation Masterclass organised by VC Circle on 31st August, 2016. Corporate Professionals acted as the event supporting partner.
• In case of a merger valuation, the emphasis is on arriving at the relative values of the shares of the merging companies to facilitate determination of the swap ratio, hence, the purpose is not to arrive at absolute values of the shares of the companies. The key issue to be addressed is that of fairness to all shareholders. There are established legal precedence for merger valuation methodologies:
• Valuer’s role is to incorporate case specific factors and use appropriate methodologies so as to determine a fair ratio
• Usually, best to give weight ages to valuation by all methods
• Market price method and Earnings methods dominate.
• It is observed that in case of M&A, the Valuations depart from the concept of “Fair Value” as elements like Distress Sale, Desperate Buy, Comparable Transaction Multiples come into play reflecting Price than Value.
About Corporate Professionals Valuation Practice
Corporate Professionals Capital Pvt. Ltd. is a SEBI Registered (Cat-1) Merchant Banker and has a successful track record of providing a broad range of M&A and Transaction Advisory Services. Our Dedicated Team has more than 10 years of rich Valuation experience and we have executed more than 500 Corporate Valuations for clients of International Repute across different Context, Industries and Boundaries.
To know more about Our Valuation offerings and how we can help you, please visit us at www.corporatevaluations.in or download our Valuation profile @ http://www.corporatevaluations.in/VALUATION_PROFILE.pdf
Introduction to Business Valuation, Fair Market Value, reasons and elements of business valuation, methodologies of business valuation, case study on net asset value.
Mr. Chander Sawhney, Partner & Head – Valuation & Deals, Corporate Professionals shared his thoughts as a guest Speaker on Valuation Principles & Techniques in Ind AS at a seminar organised by Gurgaon Branch of ICAI on 3rd September, 2016.
IndAS113 prescribes Fair Valuation definition, Techniques, Application and its Hierarchy. About 75% of the Balance Sheet Size is expected to change due to Fair Value Accounting (#IndAS109 #Financial Instruments, #IndAS102 #Share based payments, #IndAS16 Property Plant Equipments (PPE), #IndAS103 #Business combination etc. shall be impacted using #FairValue. Time to get ready, Plan Prepare and Align with the new requirements...
About Corporate Professionals Valuation Practice
Corporate Professionals Capital Pvt. Ltd. is a SEBI Registered (Cat-1) Merchant Banker and has a successful track record of providing a broad range of M&A and Transaction Advisory Services. Our Dedicated Team has more than 10 years of rich Valuation experience and we have executed more than 500 Corporate Valuations for clients of International Repute across different Context, Industries and Boundaries.
To know more about Our Valuation offerings and how we can help you, please visit us at www.corporatevaluations.in or download our Valuation profile @ http://www.corporatevaluations.in/VALUATION_PROFILE.pdf
Mr. Chander Sawhney, Partner & Head – Valuation & Deals, Corporate Professionals shared his thoughts as a guest Speaker on Relative Valuation - Techniques & Application at a Business Valuation Masterclass organised by VC Circle on 31st August, 2016.
Relative Valuation in which value of an asset or liability is done by comparing it to its Peers is pervasive and preferred for ascertaining Fair Value at a point of time as it reflects the market positioning of the Industry and Peers at that time. While Discounted Cash Flow (DCF) method is applied for arriving at Fundamental Valuation, most M&A transaction are based on Relative Valuation multiples (mostly Earnings based). The valuation ratio typically expresses the valuation as a function of a measure of Key Financial Metrics like PE, EV/EBITDA, EV/Sales or Book Value Multiple.
But before using a multiple, one should know the fundamentals determining the multiple and how changes impact it. Sanity check through use of fundamental valuation method like DCF is strongly recommended.
About Corporate Professionals Valuation Practice
Corporate Professionals Capital Pvt. Ltd. is a SEBI Registered (Cat-1) Merchant Banker and has a successful track record of providing a broad range of M&A and Transaction Advisory Services. Our Dedicated Team has more than 10 years of rich Valuation experience and we have executed more than 500 Corporate Valuations for clients of International Repute across different Context, Industries and Boundaries.
To know more about Our Valuation offerings and how we can help you, please visit us at www.corporatevaluations.in or download our Valuation profile @ http://www.corporatevaluations.in/VALUATION_PROFILE.pdf
Company Valuation PowerPoint Presentation Slides SlideTeam
Get ready-made Company Valuation PowerPoint Presentation Slides to analyse all the profit and net value your business has made. Conduct a thorough evaluation of a company’s management, capital structure, future earning prospects, and more with the help of professionally designed company valuation PPT presentation templates. Determine the current worth of a business and assess all aspects of a business. This deck comprises of several company valuation PowerPoint templates like valuation methodology, valuation steps, company valuation methodologies, determining free cash flow, valuation results, business due-diligence process, strategic due-diligence methodology, and more. Incorporate business valuation PowerPoint slideshow to estimate the selling price of the business. Use business valuation methods PowerPoint techniques for valuing a business asset such as cost approach, cost to build, replacement cost, market approach, discounted cash flow, forecast future cash flow, etc. Grab access to the company valuation complete PowerPoint deck for a business analysis. Employ a few jocular expressions with our Company Valuation Powerpoint Presentation Slides. It helps insert a bit of humor.
A clear and detailed way to present your company's valuation. Downloaded by 20.000+ entrepreneurs easy to complete, compliant and thorough. Learn more on: https://www.equidam.com/valuation-report/
Corporate Valuations “Techniques & Application”: A compilation of research oriented valuation articles.
Contents: Business valuation, Relative valuation, Sum of the parts valuation and value creation, ESOP valuation, Discounted Cash Flow Valuation, Enterprise Valuation etc.
This course will take you through the process of a typical business valuation engagement, from scoping the work to ultimately arriving at a conclusion of value. Through a case study, we will address fundamental issues including valuation approaches (asset, income and market), normalizing analysis and valuation discounts.
A Presentation given by Mr. Pavan Kumar Vijay, Past President, ICSI, Chairman-Secretarial Standards Board
on Corporate Governance through the eyes of Secretarial Standards.
There are specific steps to take when preparing a supportable business valuation.
If you need a business valuation and want to make sure that the valuation expert covers all of the bases, you should look at our slides to understand the basics of the valuation process.
The recent economic growth coupled with uncertainties has resulted in the stakeholder's curiosity and interest in Valuations of their respective investee Companies and also the estimated Valuations of the Targets available for Sale which has led to a greater demand for Business Valuation services.
Since as of now there are no Regulated standards for Valuation in India, numerous conceptual controversies still remain, even among the most prominent practitioners. With a view to give an overview of the Valuation concepts in general and the practical issues in particular, www.corporatevaluations.in, an online venture of Corporate Professionals Capital, SEBI Registered Merchant Banker has prepared this report on "Insight of Valuation". Hope you find it useful. Suggestions for improvement are invited @ info@corporatevaluations.in
Business Valuation PowerPoint Presentation SlidesSlideTeam
Presenting this set of slides with name - Business Valuation PowerPoint Presentation Slides. The stages in this process are Business Valuation, Financial Analysis, Economic Valuation.
Veracap M&A International Inc. is a leading investment bank advising on acquisitions, divestitures, financing and shareholder value initiatives.
This presentation provides a overview of basic concepts and principles of business valuation and walks you through valuation methodologies, rates of return and valuation multiples, acquisitions and divestitures.
This presentation "FEMA Valuation Aspects(FDI & ODI) and Registered Valuation" has been delivered by Mr. Chander Sawhney at East of Kailash Study Circle of ICSI on 22/11/2014.
A clear and detailed way to present your company's valuation. Downloaded by 20.000+ entrepreneurs easy to complete, compliant and thorough. Learn more on: https://www.equidam.com/valuation-report/
Corporate Valuations “Techniques & Application”: A compilation of research oriented valuation articles.
Contents: Business valuation, Relative valuation, Sum of the parts valuation and value creation, ESOP valuation, Discounted Cash Flow Valuation, Enterprise Valuation etc.
This course will take you through the process of a typical business valuation engagement, from scoping the work to ultimately arriving at a conclusion of value. Through a case study, we will address fundamental issues including valuation approaches (asset, income and market), normalizing analysis and valuation discounts.
A Presentation given by Mr. Pavan Kumar Vijay, Past President, ICSI, Chairman-Secretarial Standards Board
on Corporate Governance through the eyes of Secretarial Standards.
There are specific steps to take when preparing a supportable business valuation.
If you need a business valuation and want to make sure that the valuation expert covers all of the bases, you should look at our slides to understand the basics of the valuation process.
The recent economic growth coupled with uncertainties has resulted in the stakeholder's curiosity and interest in Valuations of their respective investee Companies and also the estimated Valuations of the Targets available for Sale which has led to a greater demand for Business Valuation services.
Since as of now there are no Regulated standards for Valuation in India, numerous conceptual controversies still remain, even among the most prominent practitioners. With a view to give an overview of the Valuation concepts in general and the practical issues in particular, www.corporatevaluations.in, an online venture of Corporate Professionals Capital, SEBI Registered Merchant Banker has prepared this report on "Insight of Valuation". Hope you find it useful. Suggestions for improvement are invited @ info@corporatevaluations.in
Business Valuation PowerPoint Presentation SlidesSlideTeam
Presenting this set of slides with name - Business Valuation PowerPoint Presentation Slides. The stages in this process are Business Valuation, Financial Analysis, Economic Valuation.
Veracap M&A International Inc. is a leading investment bank advising on acquisitions, divestitures, financing and shareholder value initiatives.
This presentation provides a overview of basic concepts and principles of business valuation and walks you through valuation methodologies, rates of return and valuation multiples, acquisitions and divestitures.
This presentation "FEMA Valuation Aspects(FDI & ODI) and Registered Valuation" has been delivered by Mr. Chander Sawhney at East of Kailash Study Circle of ICSI on 22/11/2014.
A Business Valuation Article: Relative Valuation uses the valuation ratios of Comparable publicly traded companies and applies that ratios to the comapny being valued subject to necessary adjustments.
Key Issues in Relative Valuations- a) Peer Selection, b) Current Multiples or Forward Multiples, c) Adjustments to the Value...
The 2015 budget had long list of expectations. On one hand; the Government has addressed major issues surrounding the foreign investors which would certainly boost capital market inflows and revive the private equity industry (by deferring GAAR by 2 years and clarifying Permanent Establishment & Indirect Transfer of Assets). On other hand; it has just rationalized the subsidies. Probably as we see growth coming in and more job creation; subsidy burden can be better dealt with by the Government. Though there are no direct benefits for the middle class. However incentives have been introduced to encourage savings. These savings are expected to fuel the infrastructure and other investment plans laid out by the Government. Certainly Foreign investors have a reason to cheer for this Pro Business; Pro Growth Government budget.
With the promulgation of Companies Act, 2013, provisions governing issuance of shares by offering Stock Options to the Employees have been recognized under Section 62(1)(b) of the new Act, read with Rule 12 of Companies (Share Capital and Debentures) Rules, 2014.
Watch full webinar here: http://www.firmex.com/Due-Diligence-Best-Practices-and-Pitfalls-sign-up/
LOIs and NDAs signed. Now art meets science with the legal, financial and strategic review of the business. How do you test the value proposition and identify potential risks? Select the best tools to streamline the process? And prepare for regulatory and legal compliance issues arising from legislation like FCPA? Learn what it takes to avoid pitfalls that plague even the most experienced due diligence experts.
The presentation discusses various aspects of Corporate Governance and involved issues, keeping in view the recent developments and controversies arose in conglomerates such as Tata and Infosys. It aims at portraying the extant position in filed of Corporate Governance vis-a-vis a pragmatic view of what it would be.
Presentation for ICSI Certificate Course of Valuation (Oct 2013) given by Mr. Chander Sawhney, Vice President, Corporate Professionals:
This presentation elaborately deals with Theoretical, Procedural and Regulatory aspects of Business Valuation in India.
Insight of Valuation: A presentation given at Corporate Knowledge Masterclass "Corporate Valuations- Technique and Applications" at Crowne Plaza Hotel, Gurgaon, Haryana.
Valuation in Indian Regulatory Environment with focus on Tricky Issues: the presentation given by Mr. Chander Sawhney, Vice President (chander@indiacp.com) of Corporate Professionals at the CKF Masterclass "Corporate Valuations- Techniques and Applications"...
Contents:
Business Valuation,
Relative valuation,
Sum of the Parts (SOTP) Valuation and Value Creation,
ESOP Valuation,
Discounted Cash Flow (DCF) Valuation,
Enterprise Valuation,
Valuation Discount Applicable to Holding Companies,
Valuation in Information Technology (IT) Sector,
RBI Valuation
As Associate Principal at The Monitor Group (now Monitor Deloitte) in China, part of my of my role was helping train 1st Year consultants. This is the summary presentation from a day long Masterclass in the commonly used techniques in assessing a firm's "true" value.
Correlation of Value | Appraisal Review Practice Aid for ESOP Trustees | Merc...Mercer Capital
The correlated indication of value is a value that is arrived at through some reasonable, well-articulated, replicable, and credible process of selection, averaging or otherwise, of the total valuation evidence generated from the valuation methodologies employed.
In operation, developing a correlated indication of value may appear reasonably straightforward (sometimes it is), but the considerations in the process can reach back to the smallest of details and considerations in the underlying valuation methodologies.
In this whitepaper, Mercer Capital explores the topic of the correlation of value in ESOP valuations.
Takeover Panorama, a Monthly Newsletter by Corporate Professionals on Takeove...Corporate Professionals
-The brief synopsis of recent Judicial Pronouncements given by the SEBI, AO, SAT, Informal Guidance and Consent orders passed in the month of December in the matter of SEBI Takeover Regulations.
-The brief synopsis of latest Open Offers given by the National as well as International Acquirers under the SEBI Takeover Regulations
-Unhide the hidden but important provision of the SEBI Takeover Regulations which generally get unnoticed on a plain reading of the regulations.
Acquisition of stake in YourNest Angel Fund by Religare Global Asset Management
Acquisition of stake in Bokaro Jaypee Cement by Dalmia Bharat
Telstra Health Acquires Business of IdeaObject
Promulgation of SEBI (Share Based Employee Benefit) Regulations, 2014Corporate Professionals
With our endeavor to disseminate information upon the SEBI’s new Regulations, we have prepared a small presentation on Promulgation of SEBI (Share Based Employee Benefit) Regulations, 2014.
A Monthly Newsletter by Takeover Team of Corporate Professionals.
Highlights of this edition:-
SAT order in the matter of Mr. Hemant Kothari, Mr. Rajesh Kothari, Mr. Dharmendra Kothari, Mrs. Ichraj Devi Kothari and Mrs. Sunita Kothari
SAT order in the matter ofMr. Vilas Valunji, Mr. Partha Debnath,
Mr. Janardhan Shriniwas Purandare and Mr. V. A. Norhi
Consent Order in the matter of M/s. Count N Denier (India) Limited
Consent Order in the matter of M/s. Macor Packaging Limited
Exemption Order in the matter of M/s. Sarla Performance Limited
Adjudicating Officer/WTM Orders
Regular Section- Automatic Exemption from Open Offer
Legal Updates:
•SAT order in the matter of M/s. Coimbatore Flavors & Fragrances Limited, Mr. Benny Abraham and Mrs. S. Subashini
•SAT order in the matter of M/s. E-Ally Consulting (India) Private Limited, M/s. Shree Jaisal Electronics and Industries Limited and others
•SAT order in the matter of Mr. Vijay Jain, Mrs. Urvashi Jain, Mrs. Sunita Jain and others
•Consent Order in the matter of Mr. Santhosh J. Karimattom
•Consent Order in the matter of M/s.IFL Promoters Limited
•Consent order in the matter of M/s. Welspun India Limited
•Adjudicating Officer/WTM Orders
Regular Section: Open offer Escrow Account under SEBI (SAST) Regulations,2011
Highlights of IJTIB, August 2014
Toshiba to buy 26% stake in UEM India from existing shareholders
Nissan to build Micra for European market in France instead of Chennai
Mahindra Conveyor Systems group firm forms JV with Japanese Tsubaki
India’s Karbonn to make phone batteries with a Japanese researcher
Sun Pharmaceutical, with Daiichi, to tap the Japanese market
Japan may allow India to produce parts for US-2 amphibious aircraft
Ricoh seeks to double revenue from Indian market
Japan’s Keihin corp is set to develop facilities in Bangalore
India’s Suzlon in talks for Japanese offshore wind partner
Sony plans to set up a manufacturing plant in India
Toto opens its new plant in India
Amtek and Riken join hands to form 50:50 JV
Takeover Panorama: A monthly newsletter by Takeover Code Team of Corporate Professionals
Highlights of the Panorama...
1. SAT order in the matter of Ms. Sangeeta Sethia and Mr. Prabhat Sethiavs SEBI;
2. Exemption granted in the matter of M/s Prozone Capital Shopping Centres Limited;
3. Exemption granted in the matter of M/s Sibar Autoparts Limited.
4. Adjudicating Officer/WTM Orders
Risk Management Using Derivatives in Financial Planning Journal by Gaurav K B...Corporate Professionals
it is essential to identify business risks accurately and to use the right
control techniques, because derivative products can be used as insurances policies by paying
premium. An Individual/Corporate may think that they can reduce their risk, but in case of event
specific risk and unsystematic risk it’s not the same thing. Event specific risks can only be
managed by buying insurance & unsystematic risks can be managed by diversification. In this
article we'll discuss major financial risks and the way-out to use derivatives for managing those
risks. Before going to the risk management, we have to understand some of the basic concepts
of derivatives.
NEED OF BRAND VALUATION: A brand can be valued anytime and for many reasons, that includes- Brand strategy, Financial Reporting, Mergers and acquisitions, value reporting, licensing, legal transaction, accounting, strategic planning, management information, taxation planning and compliance, liquidation.
Takeover Panorama- A monthly Newsletter by TakeoverCode.com team
-Legal Update
-Hint of the Month:
-Latest Open Offers
-Case Study: SEBI’s view on the Scheme of Arrangement of M/s Aashee Infotech Limited
-Market Update
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
Forward-thinking leaders and business managers understand the impact that discipline has on organisational success. A disciplined workforce operates with clarity, focus, and a shared understanding of expectations, ultimately driving better results, optimising productivity, and facilitating seamless collaboration.
Although discipline is not a one-size-fits-all approach, it can help create a work environment that encourages personal growth and accountability rather than solely relying on punitive measures.
In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
Discover the innovative and creative projects that highlight my journey throu...dylandmeas
Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, you’ll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
Affordable Stationery Printing Services in Jaipur | Navpack n PrintNavpack & Print
Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
Business Valuation Principles for EntrepreneursBen Wann
This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
Memorandum Of Association Constitution of Company.pptseri bangash
www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
https://seribangash.com/article-of-association-is-legal-doc-of-company/
Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
www.seribangash.com
Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
https://seribangash.com/promotors-is-person-conceived-formation-company/
Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
Digital Transformation and IT Strategy Toolkit and TemplatesAurelien Domont, MBA
This Digital Transformation and IT Strategy Toolkit was created by ex-McKinsey, Deloitte and BCG Management Consultants, after more than 5,000 hours of work. It is considered the world's best & most comprehensive Digital Transformation and IT Strategy Toolkit. It includes all the Frameworks, Best Practices & Templates required to successfully undertake the Digital Transformation of your organization and define a robust IT Strategy.
Editable Toolkit to help you reuse our content: 700 Powerpoint slides | 35 Excel sheets | 84 minutes of Video training
This PowerPoint presentation is only a small preview of our Toolkits. For more details, visit www.domontconsulting.com
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
𝐓𝐉 𝐂𝐨𝐦𝐬 provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
➢ 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
➢ SUPER JUNIOR-L.S.S. THE SHOW : Th3ee Guys in HO CHI MINH
➢FreenBecky 1st Fan Meeting in Vietnam
➢CHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
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1. Valuation & Financial Re-organization
To know how we can assist you with our Valuation services, please contact
Mr. Chander Sawhney
Partner & Head – Valuation & Deals
M: +91 9810557353
E: chander@indiacp.com
Mr. Maneesh Srivastava
Associate Vice President – Valuation & Biz Modelling
M: +91 9871026040
E: maneesh@indiacp.com
2. 28/11/2013
Business Leadership Program – SCHOOL of
INSPIRED LEADERSHIP
“In the business world, the rearview mirror is
always clearer than the windshield”
Warren Buffett
5. Value & Valuation
Value is*
An Economic concept;
An Estimate of likely prices to be concluded by the buyer and seller of a good or
service that is available for purchase;
Not a fact.
Valuation is the process of determining the “Economic Worth” of an Asset or
Company under certain assumptions and limiting conditions and subject to the
data available on the valuation date.
* Source -International Valuation Standard Council
6. Key Facts
PRICE IS NOT THE SAME AS VALUE
TRANSACTION CONCLUDES AT
NEGOTIATED PRICES
VALUATION IS HYBRID OF ART &
SCIENCE
VALUE VARIES WITH PERSON, PURPOSE
AND TIME
7. S Standard of Valuation
T Thesis of Valuation
E Economics of Valuation
M Methodologies of Valuation
8. FAIR MARKET VALUE
INTRINSIC VALUE FAIR VALUE
INVESTMENT VALUE
Standard of
Valuation
Thesis of Valuation Economics of
Valuation
Methodologies of
Valuation
Standard of Value is the hypothetical conditions under which a business is valued.
While selecting the Standard of Value following points is to be taken care of
Subject matter of Valuation;
Purpose of Valuation;
Statute;
Case Laws;
Circumstances.
Types of Standard of Value:
9. Standard of
Valuation
Thesis of Valuation Economics of
Valuation
Methodologies of
Valuation
Thesis of Value is Premise of value which relates to the assumptions upon which
the valuation is based.
Premise of Value
Going Concern – Value as an ongoing operating business enterprise.
Liquidation – Value when business is terminated . It could be ‘forced’ or ‘orderly’.
Value-in-use
Value-in-exchange
10. Growing
Cos.
Turnover/Profits: Increasing still Low
Proven Track Record: Limited
Valuation Methodology: Substantially on Business Model
Cost of Capital: Quite High
High Growth
Cos.
Turnover/Profits : Good
Proven Track Record: Available
Valuation Methodology: Business Model with Asset Base
Cost of Capital: Reasonable
Mature
Cos.
Turnover/Profits: Saturated
Proven Track Record: Widely Available
Method of Valuation: More from Existing Assets
Cost of Capital: May be High
Declining
Cos.
`
Turnover/Profits: Drops
Proven Track Record: Substantial
Operating History
Method of Valuation: Entirely
from Existing Assets
Cost of Capital: N.A.
Turnover/Profits: Negligible
Proven Track Record: None
Valuation Methodology: Entirely on Business Model
Cost of Capital: Very High
Start Up
Cos.
Turnover/Profits
Time
Valuation across business cycle follow the law of
economics
Standard of
Valuation
Thesis of Valuation Economics of
Valuation
Methodologies of
Valuation
12. Enterprise / Business Value
EnterpriseValue
Net Debt#
Equity#
Fixed
Assets#
Net Current
Assets#
Intangibles#
Stakeholders Assets
ValueofBusiness
# Based on Market Values
13. Standard of
Valuation
Thesis of Valuation Economics of
Valuation
Methodologies of
Valuation
Valuation Approaches
Income Based
Method
Asset Based
Method
Capitalization of
Earning Method
(Historical)
Discounted Cash
Flow Method
(Projected
Time Value)
Market Based
Method
Comparable
Companies Market
Multiples Method
(Listed Peers)
Comparable
Transaction Multiples
Method
(Unlisted Peers)
Market Value Method
(For Quoted
Securities)
Book Value Method
Liquidation Value
Method
Replacement Value
Method
Contingent Claim
Valuation
(Option Pricing)
Price of Recent
Investment Method
Rule of Thumb
(Multiples:
Customers, Rooms,
Seats, No. of visitors
etc.) - Depends
upon Industry
Fundamental Method Relative Method
Other Method
14. While concluding Value, all the methodologies must be considered and then weights applied
as per the facts of the case. In other words, Value conclusion should be based on the
Professional Judgement and Simple Average should best be avoided while concluding
Value.
Need of several valuation methods?
Each has strengths and weaknesses
Different methods useful in different situations
Each gives a different “take” on the value of the
company’s stock
Provides a range of valuations instead of point
estimates
Helps in Sanity Check
15. Sources of Information for Valuation
Sources of
Information
Historical financial results –
Income Statement, Balance
Sheets and Cash Flows
Data available in Public
Domain – Stock Exchange /
MCA/SEBI/Independent Report
Data on comparable
companies – SALES/EV-
EBITDA/ PAT/BV
Promoters and Management
background
Data on projects
planned/under
implementation
including future
projection
Discussion and
Representation with/by
the management of the
Company
Industry and Regulatory
trends
16. CASH FLOW
Investor assign value based on the cash flow they expect to receive in the
future
- Dividends / distributions
- Sale of liquidation proceeds
Value of a cash flow stream is a function of
- Timing of cash Receipt
- Risk associated with the cashflow
ASSETS
Operating Assets
- Assets used in the operation of the business including working capital, Property, Plant &
Equipment & Intangible assets
- Valuing of operating assets is generally reflected in the cash flow generated by the
business
Non - Operating Assets
- Assets not used in the operations including excess cash balances, and assets held for
investment purposes, such as vacant land & Securities
- Investors generally do not give much value to such assets and Structure modification
may be necessary
Key drivers of valuation
That’s why DCF is most
prominent valuation
method
Need for Restructuring
17. • Mergers
• IPO
• RBI
• Income Tax
• ESOP
• Companies Act
• SEBI
• Stock Exchange
Purpose Regulatory Accounting
• Purchase Price
Allocation
Dispute
Resolution
• Company Law
Board/ Courts
• Impairment /
Diminution
• Arbitration
• Mediation
• Acquisitions /
Investment
• Voluntary
Assessment
Value
Creation
• Equity Research
• Credit Rating
• Corporate
Planning
Valuation depends upon
18. Choice of Valuation Approaches
“Value in Valuation is a question,
and
Your choice of Method is the first step
towards answer”
Applicability of a particular approach depends upon:
On whose behalf? – one buyer vs another buyer, buyer vs seller;
For what purpose? – independent strategic acquisition, group company consolidation, cross
border transaction;
When? – distress situation, industry downturn, boom etc;
19. Choice of Valuation Approaches
• In General, Income Approach is preferred;
The dominance of profits for valuation of share was emphasised in “McCathies case” (Taxation,
69 CLR 1) where it was said that “the real value of shares in a company will depend more on the
profits which the company has been making and should be capable of making, having regard to
the nature of its business, than upon the amount which the shares would realise on liquidation”.
This was also re-iterated by the Indian Courts in Commissioner of Wealth Tax v. Mahadeo Jalan’s
case (S.C.) (86 ITR 621) and Additional Commissioner of Gift Tax v. Kusumben D. Mahadevia (S.C.)
(122 ITR 38).
• However, Asset Approach is preferred in case of Asset heavy companies
and on liquidation;
•Market Approach is preferred in case of listed entity and to evaluate the
value of unlisted company by comparing it with its listed peers;
20. Company Specific Factors
• Management, Promoter Group
It is the alignment of
Company’s value via-a-
vis to its external
environment
• Operating, Capital and Corporate Finance Strategies
• Competitive advantages and cost position
• Product / Service offering / differentiation / pricing power
•Scale & Diversification
•Customer / Supplier concentration
•Corporate Governance
•Future prospects / Growth potential
•Industry peer group
•Regulatory environment
21. Industry Risk Analysis
• Good vs. Difficult industry
• Porter’s 5 forces
• Industry life cycle (growth)
• Industry cyclicality (earnings quality)
• Leading indicators
• Competition (ROIC)
• Pricing dynamics; Demand vs. Supply (ROIC)
• Changing business environments
• Regulation (ROIC)
• Product characteristics (earnings quality)
• Capital intensity and cost base (ROIC)
• Event risk
Following factors are required to
be considered:
22. Rule of Thumb
A rule of thumb or benchmark indicator is used as a
reasonableness check against the values determined by the
use of other valuation approaches.
Industry Valuation Parameters
Hospital EV/Room
Engineering Mcap/Order Book
Mutual Fund Asset under management
OIL EV/ Barrel of equivalent
Print Media EV/Subscriber
Power EV/MW, EBITDA/Per Unit
Entertainment & Media EV/Per screen
Metals EBITDA/Ton, EV/Metric ton
Textiles EBITDA depend upon capacity utilization Percentage & per spindle value
Pharma Bulk Drugs New Drug Approvals , Patents
Airlines EV/Plane or EV/passenger
Shipping EV/Order Book, Mcap/Order Book
Cement EV/Per ton & EBITDA/Per ton
Banks Non performing Assets , Current Account & Saving Account per Branch
However, Exclusive use of Rule of Thumb is not recommended
25. Reserve
Bank of
India
Transactions Prescribed Methodologies Mandate to be done by
SNAPSHOT OF REGULATORY VALUATIONS IN INDIA
Inbound Investment with
Optionality clause
Internationally accepted
pricing methodology for
valuation of shares on
arm’s length basis
Outbound Investment
Buy back of Equity
shares/ CCP’s/ CCD’s of
listed co. issued under
FDI policy
CA / MB
Buy back of Equity shares
of unlisted co. issued
under FDI policy
Buy back of CCP / CCD of
unlisted co. issued under
FDI policy
Valuer Discretion >5Mn$ - MB, otherwise CA/MB
Allotment / Transfer of
Unquoted Equity Shares
as Gift to Non Resident
NAV as per audited Balance
Sheet as on valuation date (Min)
Gift of Unquoted Shares
other than Equity Shares
Price it would fetch if sold in
open market
ESOP Tax Valuer Discretion
Income
Tax
PCA / SEBI registered category – I
MB
MB
MB
Allotment of Unquoted
Equity Shares as Gift to
Resident
NAV as per audited Balance
Sheet as on valuation date (Min)
DCF (Max)
FCA / SEBI registered category – I
MB
Transfer of Unquoted
Equity Shares as Gift to
Resident
NAV as per audited Balance
Sheet as on valuation date (Min)
PCA / SEBI registered category – I
MB
Transfer Pricing Arm Length Price -
26. Transactions Prescribed Methodologies Mandate to be done by
SNAPSHOT OF REGULATORY VALUATIONS IN INDIA
Takeover Code/ Delisting -
Infrequently Traded
Only Parameters Prescribed
– Return on Net Worth, EPS,
NAV vis-a vis Industry
Average
Takeover Code/ Delisting -
Frequently Traded
Based on Market Price
ESOP Accounting
Option – Pricing Model
SEBI
-
PCA/MB
-
Right Issue -
Practically imposed
responsibility on lead MB to
verify the issue price
Stock
Exchanges Preferential Allotment to
promoters / their relatives
for consideration other than
cash
Valuer Discretion
Companies
Act, 1956
Sweat Equity Valuer Discretion
CA / MB
-
Preferential Allotment to
Others
Based on 26 weeks / 2 weeks
Market Price -
Companies
Act, 2013
any property, stock, shares,
debentures, securities or
goodwill or any other assets
or the net worth of the
Company or its liabilities
To be prescribed REGISTERED VALUER
28. Pre Money or Post Money: If the effect of the money coming in Company is
taken in Projections, the Expanded capital base should be considered or else the
Equity Value should be reduced by the inflow amount to reconcile with the existing
capital base.
Terminal growth rate: Since it is tough to estimate the perpetual growth rate of a
company, it is preferred to take the perpetuity growth rate factoring in long term
estimated GDP of the Country and Historical/Projection Inflation of the Country.
Projection Validation via-a-vis Industry: Need to have Sanity check of the
projections with the trend of the industry.
Beta of Unlisted Company: It is calculated on relative basis by adjusting the
average beta of its comparable companies for differences in Capital Structure of the
unlisted company with the listed peers.
Risk Free Rate: Yield of a Zero Coupon Bond or Long Term government Bond yield
should be taken as the risk free rate since it does not have any reinvestment risk .
Tricky issues in DFCF
29. Adjustment of Company Specific Risk Premium or Small Company Risk
Premium: Small Companies are generally more risky than big companies. CAPM
model does not take into consideration the size risk and specific company risk as
Beta measures only systematic risk and Market Risk Premium (generally
pertaining to Sensex Companies). These risks should also be taken into account
while computing the cost of equity.
Length of Projections: The Projected Cash Flows should factor in the entire
Business Cycle of a Company.
Notional/Actual Tax: Actual Tax Liability may be worked out and replaced for the
Notional Tax Liability
Investments: Investments should be valued separately based on their
Independent Cash Flows
Surplus Assets: The Value of Surplus Assets (not being utilized for Business
purposes) should be added separately and their cash flows should be ignored
while computing the Free Cash Flows.
Tricky issues in DFCF (Cont.)
30. Discounts
• Discount for Entity Level
Discounts & Premiums come into picture when there exist difference between the
subject being valued and the Methodologies applied. As this can translate control value
to non-control and vise versa , so these should be judiciously applied.
– Impact on entity as a whole
Key Person Discount
Discount for Contingent Liability
Discount for diversified company
Discount for Holding Company
• Discount for Shareholders Level – Impact on specific ownership interest
Discount Lack of Control (DLOC)
Discount Lack of Marketability (DLOM)
• Size of distribution or dividends
• Dispute
• Revenue / Earning – Growth / Stability
• Private Company
Tax Payout
• % stake & special rights
• Shareholders Agreement caveats
Global Studies over the years on diversified
companies and holding companies has shown
that companies trade at a discount in the range
of 20%. to 40% each.
DLOM: As per CCI Guidelines, 15%
discount has been prescribed; however
practically DLOM and DLOC depends upon
following factors:
31. Premium
“Beauty lies in the eyes of the beholder; valuation in
those of the buyer”
• An investor seeking to acquire control of a company is
typically willing to pay more than the current market price of
the company. Control premium is an amount that a buyer is
usually willing to pay over the fair market value of a publicly
traded company to acquire controlling stake in a company.
• Control can be direct (shareholding or Authority to appoint
Board) or indirect (veto power, casting vote etc)
• Research has shown that the control premium in India has
ranged from 20% to 37% in the past few years having
median of 30%.
Financial
Year
No. of
Transactio
ns
Median
Premium
2006 25 37%
2007 29 20%
2008 38 26%
2009 44 29%
2010 22 31%
2011 42 32%
Total 228 30%
32. Excess Cash and Non Operating Assets
Excess cash is defined as ‘total cash (in balance
sheet) – operating cash (i.e. minimum required cash)
to sustain operations (working capital) and manage
contingencies
Key Issue: Estimation of Excess Cash ?
Non operating Assets are the Surplus assets which are not used in operations of the business and does not
reflect its value in the operating earnings of the company. Therefore the fair market value of such Assets should be
separately added to the value derived through valuation methodologies to arrive at the value of the company.
One of the solutions is to estimate average
cash/sales or total balance sheet size of the
company’s relevant Industry and then estimate if
the company being valued has cash in excess of the
industry’s average.
What is an asset is not yielding adequate returns ?
33. Cross Holding and Investments
Holdings in other firms can be categorized into:
Types of Cross Holding Meaning
Minority, Passive Investments If the securities or assets owned in another firm represent less
than 20% of the overall ownership of that firm
Minority, Active Investments If the securities or assets owned in another firm represent
between 20% and 50% of the overall ownership of that firm
Majority, Active Investments If the securities or assets owned in another firm represent more
than 50% of the overall ownership of that firm
Investment Value
Ways to value Cross Holding and Investments:
Dividend Yield Capitalization or DCF based on expected dividends
Separate Valuation (Preferred)
By way of Shareholders
Agreement even less %
holding may command
control value
34. Accounting Practices and Tax issues
Most of the information that is used in
valuation comes from financial statements.
which in turn are made on certain
Accounting practices considered
appropriate.
• Cash Accounting v/s Accrual Accounting
• Operating Lease v/s Financial Lease
• Capitalization of Expenses
• Notional Tax vs. Actual Tax
• Treatment of Intangible Assets
• Companies Paying MAT
• Treatment of Tax benefits and Losses
35. Valuation Methodologies and Value Impact
Major Valuation Methodologies Ideal for Result
Net Asset Value
Net Asset Value (Book Value) Minority Value
Equity Value
Net Asset Value (Fair Value) Control Value
Comparable Companies Multiples (CCM) Method
Price to Earning , Book Value Multiple
Minority Value
Equity Value
EBIT , EBITDA Multiple Enterprise Value
Comparable Transaction Multiples (CTM) Method
Price to Earning , Book Value Multiple
Control Value
Equity Value
EBIT , EBITDA Multiple Enterprise Value
Discounted Cash Flow (DCF)
Equity Control Value Equity Value
Firm Enterprise Value
37. Particulars Effect Market Cap
Surplus Assets [including Cash]
Excess Debt in Capital Structure
Excess Trading Business in Manufacturing Sector
Diversified Business Model
Excess Business in Subsidiary Company
Company Performance [Operating Profits; Net Profits; New Products;
Capacity Expansion]
Increasing Cash Flows of Business
Better Corporate Governance
Better Disclosures [Investor, Analysts & Stakeholders Communication]
Regular Dividends / Bonus / Buyback
Corporate Re-organisation / M&A
Joint Ventures / Acquisitions
Market Perception
Capital Market Valuation
38. Tools Business objectives
Reorganization
of BUSINESS
Merger
De-merger/
hive - off
Acquisitions
Consolidation of
businesses / entities
Divest non-core
business
Acquiring interest in
new business/ entity
Internal
Reorganization
Restructuring within the
Company
Reorganization Tools
39. Key Drivers for Re-organization
Unlocking of Value and
its Sustainability
Positioning the
businesses to be more
competitive
Business clarity to
Investors and Analysts
Improving Governance
Processes
Making Businesswise
Fund raising possible
Business Risk
Management
Restatement of Balance
Sheet
Investor Relations
Stock & Credit Re-
rating
40. The transaction
should be Tax
efficient
Ensure that there
is least possible
Stamp
Duty/Transfer
Charges
Cost Effectiveness
Scheme should be
acceptable to all
Stakeholders
It should be easy
to Implement with
least possible
regulatory hassles
Points to ensure while implementing the restructuring exercise
41. M&A objectives – What it means?
Diversification of Risks
Access to New Technology and Knowledge
Gain access to new markets, customers, products
Ability to limit competition / gain market share
Synergies & Economies of Scale
M&A is primarily driven with motive of achieving Inorganic growth and Synergy i.e. the potential additional value gain from
combining two firms, either from operational or financial sources.
However, certain studies have shown that most – but not all – M&A fail to deliver value and bridge the price-value gap
One of the reasons is that the aggressive promoters in consultation with eager advisors may result in pushing up the acquisition
price; Resultantly, the value often get transferred from acquirer’s shareholders to target company’s shareholders;
42. 1. Differences in Risk Assessment arising from -
Company Specific Risk
• Management capability
• Future Cash Flows
Industry Risk - Business Cycles, Industry Outlook
2. Intangible Asset Valuations
3. Unproductive, high value fixed assets housed in target company
4. Cash and Stock Payout ratio
5. Ability to raise funding on buyer’s or target company’s b/s
6. Estimation of synergies (cost and revenue)
Why is there a Mismatch between Buyer & Seller expectations?
43. • In case of a merger valuation, the emphasis is on arriving at the relative values
of the shares of the merging companies to facilitate determination of the swap
ratio
– Hence, the purpose is not to arrive at absolute values of the shares of the
companies
• The key issue to be addressed is that of fairness to all shareholders
– This is particularly important where the shareholding pattern and shareholders
vary between the two companies
• There are established legal precedence for merger valuation methodologies
– Valuer’s role is to incorporate case specific factors and use appropriate
methodologies so as to determine a fair ratio
– Usually, best to give weight ages to valuation by all methods
– Market price method and Earnings methods dominate.
Swap Ratio Valuation
44. • If the exchange ratio is set too high, there will be a transfer of wealth
from the bidding firm’s stockholders to the target firm’s stockholders.
• If the exchange ratio is set too low, there will be transfer of wealth from
the target firm to the bidding firm’s stockholders.
Impact of Swap Ratio Valuation
46. Features of Steel Company*
o Frequently Traded Listed Company
o Low Profit Margin, due to high Power Cost
o Running in Low Capacity Utilization due to poor supply of Power
Features of Power Company*
o Unlisted Company
o Company is implementing the Power Plant of 9.5 MW , The Production is expected to
start with in Year
Acquisition Rationale
o Location Advantage, both companies have their unit in same Location
o Synergistic benefits- (Captive Power Plant will reduce the Operating cost, because Steel
Industry is energy consuming)
o Tax benefit from the unabsorbed losses of Power Company
o Up the value chain
o Capacity utilization will increase in existing steel business, due easy availability of Power
*Common Promoter Group
Merger of a Unlisted Power Company into Listed Steel
Manufacturing Company
47. EXCHANGE RATIO & VALUATION –MERGER
• Valuation on Steel Company
• Valuation on Power Company
Valuation Method Rs
Crores Weights
Value of
Company Weighted Value
Market Cap 2 100 200
Income Method 2 95 190
NAV 1 150 150
Fair Value of Company 108
Valuation Method Rs
Crores
Weights
Value of
Company
Weighted Value
Market Cap 2 NA NA
Income Method^ 2 90 180
NAV 1 50 50
Fair Value of Company 76.67
^ considering 3 years forward earnings and 80-90% Capacity utilization basis
Merger of a Unlisted Power Company into Listed Steel
Manufacturing Company
48. Pre Merger Shareholding of Steel Company
Category No of shares % Holding
Promoter 5,000,000 50%
Public 5,000,000 50%
Total 10,000,000 100%
Pre Merger Shareholding of Power
Company
Category No of shares % Holding
Promoter 5,000,000 100%
Public - -
Total 5,000,000 100%
Post Merger Shareholding of Steel
Company
Category No of shares % Holding
Promoter 12,099,074 71%
Public 5,000,000 29%
Total 17,099,074 100%
Independent Buyer-Seller
Perspective
Valuation of Power business on as
is basis – Rs.55 crores
Assets Method
Earnings Method (Includes
premium for the license)
Valuation of Power business
taking into account synergies –
Rs. 70 crores
An independent Buyer would bid
an amount in excess of valuation
on standalone basis (Rs. 55
crores) and below Synergy
valuation (Rs.70 crores).
Acquisition Price would finally
depend on negotiations.
Pre and Post Shareholding
50. - Availability of Inter division Cash Flows for
servicing of debt;
- Security for debt providers;
- Cushioning impact of business down turns;
- Better size in terms of revenues
- Markets perceive lack of
- Management focus
- Business Clarity
- Transparency
- Difficulty in Business wise Fund
Raising
- Diversified Business Discount
resulting in sub-optimal Businesswise
Valuations
Pros and Cons of Diversified Business in one Entity
51. Focus on core competencies – Bajaj Auto
Facilitate strategic investment – Volvo & Eicher Motors
Unlocking shareholders value – Cadila Healthcare
Regulatory Reasons – Zee Telefilms
Settling family agreements – Reliance Industries
Divestment - Piramal Healthcare Limited
De-risking the business model – Sun Pharmaceutical
Demerger of Research & Development division
However, there are other reasons as well, like-
52. Reliance Group Market prices (In Rs)
Pre demerger Post demerger
Reliance Industries 702 698
Reliance Capital Ventures - 23
Reliance Communication
Ventures - 292
Reliance Energy Ventures - 43
Reliance Natural
Resource - 18
TOTAL 702 1074
Demerger resulted in increased shareholders value
28/11/2013
Business Leadership Program –
SCHOOL of INSPIRED LEADERSHIP
“That is what learning is, you suddenly understand
something you have understood all your life, but in a new
way”
…………………………….. Doris Lessing
53. About
Corporate Professionals
Offering varied legal & financial services, 'Corporate Professionals' has emerged as an innovative leader in
delivering corporate advisory & solutions. Aiming to become a one-stop-shop offering integrated legal and
financial solutions, the Group has successfully completed a high number of corporate transactions in the last
couple of years. We have successfully engaged in and executed over 3000 assignments of more than 1200
corporate houses, domestic as well as international, across several Industries.
The Group has distinctively positioned itself as Merchant Banker (SEBI Cat-I license) with Boutique
Investment Banking & Transaction Advisory services and as Legal Advisors with high quality comprehensive
Corporate Laws, Tax & Regulatory services. With an endeavor to satisfy our clients' stated as well as
unstated needs, we adopt the most feasible and legally viable approach to execute assignments in a
seamless, cost effective and time bound manner. High Integrity and Confidentiality in dealing with clients
and assignments undertaken is deeply inculcated in our team.
The Group prestigiously owns a strong skill set that comes from its research oriented, multi-disciplinary,
young and dynamic team. With right blend of legal and financial skills, continuous focus on research and
effective use of Information Technology, Corporate Professionals is creating customized products, for
different class of clients. Innovative flair of executing assignments with problem solving zeal and use of
Technology has enabled us to offer path breaking solutions. Not just for executing Clients' Assignments but
also in internal management, the Group adheres to a system driven approach.
The Group dedicates around 30% working time of its professional team on continuous research in the
dynamic legal and financial fields, with an object of creating a knowledge hub, extensive knowledge
dissemination and to develop skills of its team to deliver high quality services.
“Corporate Professionals” refers to one or more of group companies and its network of firms and other
entities, each of which is a separate legal, independent entity. For more details, please visit
www.corporateprofessionals.com.
54. Mr. Chander Sawhney
Partner & Head – Valuation & Deals
M: +91 9810557353
D: +91 11 40622252
E: chander@indiacp.com
Mr. Maneesh Srivastava
AVP – Valuation & Biz Modelling
M: +91 9871026040
D: +91 11 40622255
E: maneesh@indiacp.com
Mr. Gaurav Kumar Barick
Manager – Valuation & Biz Modelling
M: +91 8130141874
D: +91 11 40622241
E: gaurav@indiacp.com
Mr. Sameer Verma
Deputy Manager – Valuation and Biz Modelling
M: +91 9911945607
D: +91 11 40622216
E: sameer@indiacp.com
Our Valuation Team