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    From clean earnings to a number you can defend

    We clean the earnings first, then value the business three ways and set the results against each other. Then we test the number against the buyers who would pay it.

    In an unlisted company, shares issued to a foreign investor must be priced at or above fair value. (read where we wrote it)

    What do we value, and for which decision?

    A number is only useful for the decision it was made for. So we value for one decision at a time, and show the reasoning.

    1. Value the business three ways

      Each method answers a different question, so we set them against each other.

      • Earnings cleaned of one-off and owner items first
      • Comparable transactions
      • Comparable listed companies
      • A discounted cash flow

    2. Value it for the decision in front of you

      A number for one decision, with the reasoning shown.

      • Selling or buying a company
      • A fundraise or ESOP pricing
      • A partner's exit or a shareholder dispute

    3. Statutory valuation reports

      Where a law names who must sign, a registered professional we work with signs it, on the same numbers.

      • Companies Act reports, signed by an IBBI registered valuer
      • FEMA and income-tax fair value, signed by the professional each rule names

    How do we get from the accounts to a number a buyer accepts?

    Three steps settle the number. The fourth puts the right signature on it, where a law asks for one.

    1. Clean the earnings first

      Owner expenses, one-off items and dealings with related companies at non-market prices are taken out, so every method starts from earnings a buyer would accept.

    2. Value it three ways

      Comparable transactions, comparable listed companies and a discounted cash flow, set against each other. Where they disagree, the disagreement is the finding.

    3. Test it against the buyer

      The number that counts is what a particular buyer will pay for. We work out which buyers those are, and what each one would be paying for.

    4. Get the right signature where the law needs one

      For a Companies Act, FEMA or income-tax valuation, the report is signed by the registered professional that law names, working with us on the same numbers.

    What do owners ask about valuing a company?

    How is a private company valued in India?

    Usually three ways: what similar companies sold for, what similar listed companies trade at, and what the future cash flows are worth today. Each has weaknesses for a private company, which is why they are used together.

    Do we need a registered valuer?

    Only where a law asks for one. The Companies Act requires an IBBI registered valuer for some transactions, and FEMA and the income-tax rules name who may certify fair value. For a sale or a negotiation no law sets who values the business, and the buyer will test the reasoning rather than the signature.

    Why do two valuations of the same company differ?

    Because they answer different questions. A company in the same business may pay for savings only it can make. A fund pays for what the company earns on its own. A valuation should say whose number it is.

    Is a revenue multiple a valuation?

    It is a shortcut with a valuation hidden inside it. A revenue multiple assumes a margin, so it only holds for companies whose margins look like the ones it was taken from.