Valuation Services
Navigating the Art and Science of Valuation
“The worth of a business is measured not by what has been put into it, but by what can be taken out of it.”
India carries a rich history of valuation services, dating back to ancient times when valuation was orchestrated with the intention of taxation and land measurement. Business valuation in India has evolved alongside economic shifts.
Valuation Service
As markets matured, valuation became integral for mergers, acquisitions, and financial planning. The 21st century saw increased regulatory focus, shaping valuation practices. Today, it’s a vital tool aligning with India’s dynamic business landscape.
Let’s delve into the intricacies, decode the financial narratives, and together, unlock the untapped potential that lies within the heart of India’s business valuation landscape.
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Business Valuation: The Principle
Business valuation services encompass the intricate process of assessing the economic value of a business or its assets. These services are commonly enlisted for diverse purposes, including but not limited to, facilitating transactions such as the acquisition or sale of a business, navigating mergers and acquisitions, fulfilling financial reporting requirements, strategizing for tax planning, offering litigation support, and aiding in other critical decision-making processes.
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Closed Multiple valuations across various sectors.
Dedicated team of sector specialists and specialization for instruments
Completed 100+ Fund Raising deals.
650+ successful transactions.
Over 10 years of combined experience,
Empanelled with various PSU Banks and Financial Institute.
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The primary objective of business valuation is to thoroughly evaluate the worth of a business entity. This comprehensive assessment takes into account a myriad of factors, including tangible and intangible assets, financial performance metrics, market positioning, growth potential, and various other pertinent considerations. The culmination of these analyses aims to provide a nuanced and accurate estimation of the business’s overall value.
Business valuation can be undertaken using various methodologies, each offering a unique perspective on the company’s worth. These approaches include:
This method involves a comparative analysis, where the business is assessed by comparing it to similar enterprises that have recently been transacted in the market.
This approach focuses on evaluating the present value of anticipated future cash flows generated by the business. It provides insights into the company's value based on its income-generating potential.
In this approach, the value of the business is determined by considering both tangible and intangible assets while deducting liabilities. This method offers a comprehensive understanding of the company's net asset value.
This method involves estimating the cost required to replicate the business with comparable assets and liabilities. It provides an insight into the value of the company by assessing the expenses associated with recreating its structure.
Business valuation services are invaluable for owners, investors, and stakeholders, providing essential insights for informed decision-making in areas like selling, buying, merging, and strategic planning.
They enhance transaction efficiency in mergers, acquisitions, or sales by determining fair prices and fostering equitable negotiations. Ensuring financial reporting compliance for private companies, and accurate valuations bolster the credibility of financial statements.
BUSINESS VALUATION
- Companies Act
- RBI / FEMA- Issue/ Transfer of Shares
- Income Tax — ESOP, Issue / Transfer of Shares
- SEBI- Delisting, Takeover Code, ESOP
- IBBI- Insolvency / Liquidation Valuations
- Valuation for Transaction & Restructuring- M&A / Demerger
- Acquisition related valuations
FINANCIAL REPORTING VALUATION (IND AS, IFRS & US GAAP)
- Purchase Price Allocation
- Goodwill / Impairment tests
- Intangible Asset Valuation [Patents, Brand, Trademarks]
- Financial Instruments [Derivatives, Hybird, Convertibles]
- Valuation for Private Equity/Venture Capitalist/AlF Fixed Assets valuation
SPECIALISED VALUATION
- Fairness Opinion
- Real Options
- Arbitration, Litigation and
- Dispute Valuation
- Family Settlement
- Claim for Damages Valuation
VALUATION ADVISORY
- Financial Modelling
- Capital Budgeting Decision
- Value Enhancement
- Negotiation Support
Ready to Make Informed Decisions? Trust Nexpective Advisors for Accurate Business Valuations.
Additionally, these services support strategic tax planning, equity issuance, litigation credibility, ESOP implementation, strategic insight, risk assessment, and succession planning, aiding in effective long-term business strategies. Overall, business valuations play a pivotal role in optimizing financial decisions and organizational growth.
Discipline Of Valuation
Let’s briefly discuss the scope of valuation under different regulations.
Under the Companies Act, 2013, registered valuers designated by the IBBI are mandated to conduct valuations for unlisted companies in various transactions, such as allotment of securities, issuance of sweat equity shares, private placement of shares, and valuation of undertakings or assets.
In the Insolvency and Bankruptcy Code (IBC), valuation is crucial at different stages, as per IBBI regulations. This involves appointing registered valuers to determine fair value and liquidation value in processes like CIRP, Voluntary Liquidation, and Fast Track Insolvency Resolution, ensuring independence and restricting specific affiliations for valuers.
In case on FEMA, Valuation is required whenever there is issue or transfer of shares happen between resident and non-resident. For listed company in India, valuation will be as per Market price SEBI Preferential allotment. For Unlisted company, Valuation Report is required from Chartered Accountants as per International accepted Valuation Standard as prescribed by International Valuation Standards Council
Valuation under IFRS is crucial for determining carrying amounts, recognizing gains, measuring goodwill, and assessing impairment, aligning with IFRS's goal of providing reliable financial information.
IFRS mandates valuation for transparent financial reporting. IFRS 13 guides fair value measurement, IFRS 9 emphasizes initial recognition of financial instruments at fair value, and impairment considerations are in standards like IFRS 36, IFRS 28, and IFRS 41.
Nexpective Advisors: Your Assets, Our Expertise
Nexpective Advisors, a distinguished professional firm in Vadodara, Gujarat, offers a comprehensive suite of services, including Accounting Advisory, Start-up Advisory, Income Tax, GST, Finance & Capital Advisory, and Regulatory Compliance.
Our seasoned team, comprising Chartered Accountants, Company Secretaries, Lawyers, and Chartered Financial Analysts, excels not only in core services but also in specialized areas like business valuation, financial reporting valuation, valuation advisory, and tailored valuations.
Count on us for meticulous insights, making us your trusted partner in navigating mergers, strategic growth planning, and ensuring precision in financial reporting. For the best valuation services in Vadodara, rely on Nexpective Advisors to deliver excellence.
Elevate Your Business with Nexpective Advisors – Your Partner in Strategic Valuation Excellence.
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Frequently Asked Questions
In business, valuation is the process of determining the economic worth of a company or asset. It involves assessing factors like financial performance and market conditions to make informed decisions about buying, selling, investing, or strategic planning. Different methods, such as income and market approaches, are used for this assessment.
Business valuations come in various forms, including Asset Valuation (assessing the value of tangible and intangible assets), Market Valuation (determining value based on market comparisons), and Income Valuation (evaluating future income potential). Each method provides unique insights, helping businesses make informed decisions about their worth and strategies.
Stay updated on the latest trends shaping business valuation, including the impact of technology, evolving market dynamics, and regulatory changes, to make informed decisions in today's dynamic business environment.
Businesses benefit from specialized valuation services by gaining accurate insights into their worth, identifying growth opportunities, and making informed financial decisions, guiding strategic choices for sustainable growth and success.
Company valuations in India are typically performed by qualified professionals such as Chartered Accountants, Registered Valuers, and specialized valuation firms. The Institute of Chartered Accountants of India (ICAI) and the Insolvency and Bankruptcy Board of India (IBBI) regulate and accredit valuers in the country.
A business valuation's validity is typically three months to six months, contingent on factors like the purpose and market conditions. Reassessment is recommended with significant changes in the business or market dynamics.
Equity value is the total value of all outstanding stock of the company whereas enterprise value is the total net worth of a company net of cash and debt.
Equity value is calculated by multiplying price of a single share of stock with the number of shares outstanding whereas enterprise value is calculated after deducting cash, investments and debt from equity value.
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