When is valuation required?

• Regulatory compliance:

  • Companies Act

  • Income-tax Act

  • Foreign Exchange Management Act (‘FEMA’)

  • Securities Exchange Board of India (‘SEBI’)

  • Insolvency and Bankruptcy Code (‘IBC’)

• Capital structuring: equity investments, mergers, acquisitions, demergers, slump sale, share capital reduction, buyback

• Financial reporting: fair value measurement as required under Indian Accounting Standard (‘Ind‑AS’); purchase price allocation (‘PPA’), employee stock options (‘ESOP’)

• Intangible assets valuation: brands, customer contracts, distribution network, know-how, human capital, etc.

• Dispute resolution: partner disputes, private equity buyback, etc.

Valuation approach

The value analysis is based on careful consideration of the facts and circumstances of a business situation, after taking into consideration the relevant valuation approaches and methodologies that are internationally accepted.

• The commonly used internationally accepted approaches and methodologies for valuing businesses/ assets are as follows:

  • Market approach: Under this approach, a business is usually valued considering the market price of similar and/ or identical assets for which market price information is available.

    • Comparable Companies Multiples method (‘CCM’)

    • Comparable Transaction Multiples method (‘CTM’)

    • Market Price method (‘MP’)

  • Income approach: The income approach provides an indication of value by converting future cash flows to a single current value.

    • Discounted Cash Flow method (‘DCF’)

    • Relief from Royalty method (‘RRM’)

    • Multi-Period Excess Earnings method (‘MEEM’)

    • With and Without method (‘WWM’)

    • Option Pricing models

  • Cost/ Asset approach: Cost approach indicates the value by adjusting the asset and liability balances in the balance sheet.

    • Replacement cost method

    • Reproduction cost method

    • Summation/ Net Asset Value method (‘NAV’)

Why us?

• Our strength in value analysis stems from our diversified background not only in financial modelling and forecasting, but also in M&A transaction negotiation and structuring as well as having experience in accounting and reporting.

• Our associate firms include Chartered Accountants firm (for FEMA and Income-tax valuation compliances); registered valuers (registered with IBBI for Companies Act valuation compliances); and Category I – Merchant Bank (registered with SEBI).

With these associations and experience, we can cater to any valuation requirement, whether required for statutory compliances or for internal management purposes.