Market Insights of Business or Startup Valuation in India

The valuation of a company is one of the most important items when preparing for any business transaction and that generally depends on various factors. Buy-side expect to pay the lowest price for any business transaction. A good valuation exercise will aid you with the tools needed to defend your valuation when it’s time to sell or to raise capital etc…

We will be curating comments, articles, news related to valuations here.

Valuation should lead to value creation

Alok Patina (Managing partner at Profitboard ventures) writes, ” Valuation alone can never be the parameter on which a business should focus. A business creates value when it is able to generate steady revenue, maintain stable profitability, create an impact and establishes a model that can be financially viable to last for generations.” more about that here (March 2021)

Proper startup valuation exercise will avoid queries from Tax department

Sachin Dave from Times Group writes, “Company valuations carried out ‘properly’ can’t be challenged later: HC. The Delhi high court in a recent ruling has said if a proper methodology is followed while valuing a startup or company during valuation rounds, it should not be challenged later, thereby setting up ground to provide relief to several startups from taxman questioning their valuations during fund raising rounds and slapping angel tax.more about that here (March 2021)

Market Risk and Valuation Uncertainty

The (IVSC) provided insight in how to deal with valuation uncertainty. First of all, the difference between market risk and valuation uncertainty is clarified. IVSC defines market risk as: “the exposure that the owner of an asset has to potential future gains or losses”. Risk, therefore, should under any circumstances, be taken into account by informed buyers/sellers. Moreover, under a common (DCF) valuation approach, market risks should be reflected in a valuation via the determination of an appropriate discount rate. More about this article here (April 2021)

2 thoughts on “Market Insights of Business or Startup Valuation in India

  1. Market Risk and Valuation Uncertainty: The (IVSC) provided insight in how to deal with valuation uncertainty. First of all, the difference between market risk and valuation uncertainty is clarified. IVSC defines market risk as: “the exposure that the owner of an asset has to potential future gains or losses”. Risk, therefore, should under any circumstances, be taken into account by informed buyers/sellers. Moreover, under a common (DCF) valuation approach, market risks should be reflected in a valuation via the determination of an appropriate discount rate. More about this article here (April 2021)

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