The right report for the purpose
A report prepared for a shareholder negotiation will not satisfy a filing requirement. The purpose is fixed first, so the report is usable where you need to use it.
Valuation & Research
Business Valuation Services
Valuation of companies, shareholdings and instruments for statutory, transaction and reporting purposes, prepared under the ICAI Valuation Standards with the method, inputs and sensitivities set out in full.
A valuation is only as good as the questions it was asked. The same company is worth different amounts to a minority investor, an acquirer buying control, an assessing officer applying a prescribed rule, and an auditor testing an impairment. A report that does not say which question it answered is not usable.
Overview
You need a number, and you need it to hold. Perhaps a round is being priced and the allotment cannot be made without a report. Perhaps a non-resident is coming onto the cap table and the price has to sit on the correct side of the FEMA floor. Perhaps a shareholder is exiting, a scheme is going to the NCLT, an impairment test is due, or a purchase price has to be allocated across the assets acquired.
Each of those has a defined basis of value, a prescribed method or a permitted set of methods, and a reader who will test the inputs rather than admire the conclusion. We prepare valuations under the ICAI Valuation Standards, state the premise and basis on the first page, disclose every input and its source, and show what the answer does when the inputs move. Where a statute prescribes the computation, the prescribed computation is applied and shown alongside the economic view rather than instead of it.
Scope of engagement
- Valuation for preferential allotment under Section 62(1)(c) and private placement under Section 42 of the Companies Act 2013, including the report required before the offer letter in Form PAS-4 is circulated.
- Share swap and exchange ratio valuation for schemes of arrangement and amalgamation under Sections 230 to 232, and valuation for minority squeeze-out under Section 236.
- FEMA pricing compliance: the arm’s length price under the Non-Debt Instruments Rules, applied as a floor on issue or transfer to a non-resident and as a cap on transfer from a non-resident to a resident, with the basis documented for the Form FC-GPR or FC-TRS filing.
- Income tax valuations: fair market value of unquoted equity shares under Rule 11UA for Section 56(2)(x) in the recipient’s hands, and under Rule 11UAA for Section 50CA where the transfer consideration is below fair market value.
- Valuation of compulsorily convertible preference shares, compulsorily convertible debentures, options and other instruments, including the allocation of equity value across classes where a liquidation preference or participation right exists.
- Financial reporting valuations: purchase price allocation and the identification of intangibles under Ind AS 103, impairment testing of cash-generating units under Ind AS 36, fair value measurement and hierarchy classification under Ind AS 113, and share-based payment charges under Ind AS 102.
Deliverables
- A valuation report stating purpose, valuation date, premise, basis of value, standard of value, methods considered and methods rejected with the reason for rejection.
- The discounted cash flow build: free cash flow to firm or equity, the cost of capital derivation with the risk-free rate, relevered beta, equity risk premium and any size or company-specific premium each shown separately, and terminal value under the growth and exit multiple methods.
- The market approach build: the comparable company set with the reason each company was included, the multiples applied, and where comparable transactions are used, the source and date of each.
- A weighting note explaining how the approaches were combined, and any discount for lack of marketability or lack of control, with the basis for the quantum applied.
- A sensitivity table showing the effect on value of movement in the discount rate, terminal growth, margin and the two or three operating drivers that matter most.
- The statutory computation as a separate schedule where a rule prescribes one, so the reader can see the prescribed answer and the economic answer side by side.
- A working spreadsheet with live formulae, delivered alongside the report.
Process
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Purpose and basis
Fixing why the valuation is needed, who will read it, the valuation date, and therefore the basis of value and the permitted methods. This determines everything downstream and is settled before data is requested.
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Information and management discussion
Financial statements, trial balances, cap table, instrument terms, order book, capital expenditure plan and projections collected, followed by a discussion with management on the business model and the assumptions behind the forecast.
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Analysis and modelling
Historical normalisation, forecast testing, cost of capital derivation, comparable selection and the build of each approach applied. Instrument terms are modelled where value has to be allocated across classes.
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Draft and review
A draft is issued for factual correction on the inputs. Management can correct facts. The conclusion is ours and is not negotiated.
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Final report and signature
The report is finalised, signed in the form the purpose requires, and supported through any question from your auditor, your counsel or the counterparty.
Benefits
Every input visible
Discount rate components, comparables, and discounts applied are shown separately. A reader can disagree with an input without discarding the report.
Instruments modelled properly
Preference terms change who receives what. Value is allocated across classes rather than divided by a share count.
Industries served
Method selection is driven by the economics of the sector. Manufacturing valuations weight the asset approach more heavily and require attention to capacity, replacement cost and the capital expenditure needed to sustain the forecast. Technology and software valuations centre on recurring revenue, retention and the cost of acquiring it, with revenue multiples used where earnings are suppressed by growth spending. Healthcare valuations depend on licensed capacity, occupancy and payer mix.
Typical timeline
| Stage | Elapsed time |
|---|---|
| Purpose call and information request list | 1-2 business days |
| Information collection and management discussion | 3-7 business days |
| Analysis and modelling | 5-10 business days |
| Draft report and factual review | 3-5 business days |
| Signed final report | 2-3 business days after comments close |
A single operating company with audited accounts and a straightforward cap table completes in about two weeks. A group with several entities, an overseas subsidiary or a multi-class preference stack runs to five.
Engagement model
Valuations are contracted on a fixed fee per report, quoted after the purpose call, with the entity, valuation date, purpose, basis of value and intended readership recorded in the engagement letter. The fee is never linked to the value concluded, to the completion of a transaction or to acceptance by any authority.
Delivery is virtual. Information is exchanged through a controlled folder, management discussion is held by video, and the signed report is issued in the form the purpose requires.
What is not included
These sit outside a valuation engagement unless separately scoped and agreed in writing.
- Audit or verification of the financial information relied on. Financial statements are taken as presented, and the report identifies which figures were unaudited.
- Preparation of the projections. Forecasts remain management’s; we test them and disclose the tests, but we do not author the plan and then value it.
- Valuation of land, buildings, plant and machinery. Those are separate asset classes under the Registered Valuers Rules and require a valuer registered for that class.
- Fairness opinions for listed companies and any report reserved to a registered merchant banker under the SEBI regulations.
- Representation before an assessing officer, the Dispute Resolution Panel, the NCLT or any appellate authority where the value is challenged.
- Transfer pricing benchmarking studies and the accountant’s report in Form 3CEB, which are a separate discipline with their own prescribed methods.
A valuation is an opinion of value on a stated date, on a stated basis, for a stated purpose and reader. Used for any other purpose, it is not reliable and the report says so.
Tell us why the number is needed and who will read it. That single answer determines the method, the form of the report and the fee.
Frequently asked questions
Valuations under the Companies Act 2013 must be conducted by a registered valuer under Section 247, read with the Companies (Registered Valuers and Valuation) Rules 2017. That covers preferential allotment under Section 62(1)(c), private placement under Section 42, schemes under Sections 230 to 232, minority squeeze-out under Section 236 and non-cash transactions with directors under Section 192. Work requiring a registered signatory is performed and signed by a professional holding the relevant registration.
They answer different questions and can produce different numbers. The FEMA Non-Debt Instruments Rules require an arm's length price under an internationally accepted methodology, operating as a floor when issuing to a non-resident and a cap when a non-resident sells to a resident. The income tax rules prescribe computation under Rule 11UA and Rule 11UAA. A single report can address both, but the bases are stated separately.
Audited statements for the last three financial years are the preferred basis, with a provisional trial balance for the stub period to the valuation date. Where audits are pending, we can work from management accounts, but the report states that the financial information is unaudited and identifies which conclusions would move if the audited numbers differ. Some statutory purposes will not accept an unaudited basis.
Management's. We test them for internal consistency, for agreement with historical performance and with the order book, and for whether the working capital and capital expenditure needed to deliver the revenue has actually been provided for in the cash flow. Where an assumption cannot be supported, we say so in the report and show the effect of a more defensible one in the sensitivity table.
Not on earnings multiples, which are meaningless without earnings. Depending on the facts, the basis may be a discounted cash flow from the point cash generation begins, revenue or user multiples from comparable transactions, replacement cost of the asset base and technology, or an option pricing allocation across preference and equity classes where a priced round has set a recent benchmark. The report explains why the chosen basis fits.
No valuer can promise that, and one who does is not describing how assessments work. What reduces challenge is a report that states the method, discloses every input and its source, applies the prescribed rule where a rule exists, and reconciles to the transaction price. Where the value is later questioned, representation before the assessing officer is separate work under our tax notice service.
Yes. Intangible asset valuation follows ICAI Valuation Standard 302, using relief-from-royalty, multi-period excess earnings or cost approaches depending on the asset. ESOP fair value for the Ind AS 102 charge is computed using Black-Scholes or a binomial model with the inputs disclosed. Perquisite valuation on exercise under Rule 3(8) has its own prescribed basis and is dealt with separately in the report.
Related services
Transaction Advisory Services
Due diligence, structuring and completion accounts support where the valuation sits inside a live acquisition or investment.
Lead Advisory Services
Mandate management for a sale or a capital raise, including the negotiation the valuation is meant to inform.
Project Research & Feasibility Studies
Where value depends on a project not yet built, the demand case, capital cost and returns analysis underneath the forecast.