Business Valuation
For fundraising, buyouts & ESOPs
Registered-valuer and CA business valuations — DCF, NAV and comparable methods — for fund raises, share transfers, ESOPs and regulatory filings.
What's included
- Method selection (DCF/NAV/CCM)
- Detailed valuation report
- Rule 11UA / FEMA compliance
- Certified & UDIN-verified
Understanding Business Valuation
A business valuation puts a defensible number on a company or its shares, and in India the rules decide who may sign that number. Income tax valuations of unquoted shares follow Rule 11UA of the Income Tax Rules; valuations for Companies Act purposes — preferential allotments, sweat equity, mergers under sections 230-232 — must come from a registered valuer under section 247 of the Companies Act, 2013, registered with IBBI; and share issues or transfers involving non-residents must respect FEMA pricing guidelines, with price benchmarked to fair value under an internationally accepted methodology. Using the wrong signatory is as fatal as using the wrong number.
The methodology depends on purpose and stage. Discounted cash flow (DCF) suits startups and growth businesses where value lies in future earnings; net asset value (NAV) fits asset-heavy or holding companies and is the prescribed floor in several tax contexts; and the comparable companies method (CCM) benchmarks against multiples of similar listed or transacted businesses. A credible report usually triangulates more than one method and documents the assumptions, because investors, the tax officer and the RBI's authorised dealer bank will each stress-test them.
Founders typically need a valuation at fundraising, when granting or exercising ESOPs, at buyouts and exits, for family settlements, and for gift or transfer of shares where section 56(2)(x) taxes the recipient on any discount to fair value. We prepare the valuation, issue the report under the correct authority for your purpose, and defend it in diligence — for ₹9,999, delivered in 5-10 working days depending on data readiness.
Who needs this?
Startups raising equity
A fresh issue of shares needs a valuation report — a registered valuer's report for Companies Act compliance on preferential allotment, and FEMA-compliant fair value where any investor is a non-resident.
Companies issuing ESOPs or sweat equity
ESOP exercise triggers a perquisite computed on fair market value, and sweat equity issues under the Companies Act require a registered valuer's report to fix the price.
Founders and investors transferring shares
Buyouts, secondaries and exits need fair value to satisfy section 56(2)(x) on the buyer's side, section 50CA on the seller's side, and FEMA pricing caps or floors where a non-resident is involved.
Businesses in mergers, demergers and restructuring
Schemes of arrangement, share swaps and internal restructurings require valuation reports and swap ratios that the NCLT, shareholders and tax authorities will scrutinise.
Family businesses in succession or settlement
Dividing a business among family members, admitting or retiring partners, and estate planning all turn on an agreed, independent value that prevents disputes later.
Companies with foreign investment transactions
Issue of shares to a non-resident cannot be below fair value, and transfer from a non-resident to a resident cannot be above it — every such transaction needs a valuation certificate for the AD bank's FC-GPR or FC-TRS filings.
When this is NOT the right fit
| Your situation | What applies instead |
|---|---|
| ✕You need a valuation for a court-supervised insolvency process | CIRP and liquidation valuations under the Insolvency and Bankruptcy Code must be done by two registered valuers appointed by the resolution professional — a standard advisory valuation cannot substitute. |
| ✕The purpose requires a merchant banker's report | Certain income tax valuations — notably ESOP perquisite FMV for unlisted companies and some Rule 11UA options — are reserved for SEBI-registered merchant bankers. We tell you upfront if your purpose falls there and coordinate with one. |
| ✕You want a target number certified rather than derived | A valuation works backwards from evidence, not forwards from a desired figure. Reports written to hit a predetermined price collapse in diligence and expose everyone who relied on them. |
Not sure which applies to you? Message us — we'll point you to the right service in minutes, free.
Documents you'll need — and why
Audited financial statements for 3-5 years
Historical performance anchors every method — margins, growth and asset base all come from these.
Provisional financials for the current year
Valuation is as on a recent date, so year-to-date numbers bridge the gap from the last audit.
Financial projections for 5 years
DCF is driven by management's projections; we test them for reasonableness but cannot invent them.
Capitalisation table and shareholding pattern
Per-share value depends on fully diluted shares, ESOP pools and any differential rights attached to share classes.
Details of the proposed transaction
Purpose, counterparty and residency status decide the applicable rule — Rule 11UA, section 247, FEMA — and therefore the method and signatory.
Fixed asset register and investment details
NAV computations need current values of property, investments and other assets, especially for asset-heavy businesses.
Key contracts, order book and customer concentration data
Revenue durability and concentration risk directly move discount rates and multiples.
Prior valuation reports and recent funding terms
Recent transactions in the company's own shares are strong value evidence and any large divergence must be explained.
How it works, step by step
- 1
Purpose and framework scoping
Day 1We fix why the valuation is needed and map it to the governing framework — Rule 11UA, section 247 registered valuer, FEMA, or a combination — so the report is signed by the right authority.
- 2
Data collection and management discussion
Day 2-4We gather financials, projections and the cap table, then walk through the business model, pipeline and risks with the founders to test assumptions.
- 3
Modelling and method triangulation
Day 4-7We build the DCF, compute NAV and benchmark comparable multiples, reconcile the range and select the concluded value with documented reasoning.
- 4
Draft report and discussion
Day 7-9You receive the draft report with assumptions laid out; we walk you through it and incorporate factual corrections before finalising.
- 5
Signed report and transaction support
Day 9-10The final report is issued under the appropriate authority with UDIN where applicable, and we support queries from investors, the AD bank or authorities afterwards.
What non-compliance costs
Shares issued to a resident above fair value without a defensible report
Historically taxed under section 56(2)(viib); though that provision was abolished from FY 2024-25, aggressive pricing still invites scrutiny of the source and genuineness of the premium.
Shares received at a discount to fair market value
The recipient is taxed under section 56(2)(x) on the shortfall where it exceeds ₹50,000, computed on Rule 11UA values — a surprise tax bill for buyers in underpriced secondaries.
FEMA pricing breach on issue or transfer involving a non-resident
The transaction becomes a FEMA contravention requiring compounding before the RBI, with compounding penalties computed on the amount involved and delays to the FC-GPR or FC-TRS filings.
Companies Act valuation done by someone who is not a registered valuer
The allotment or scheme becomes non-compliant with section 247, exposing the company and officers to penalties and giving objectors a ground to challenge the transaction.
Why doing this right pays off
Right signatory for the right law
We map your transaction to Rule 11UA, section 247 and FEMA requirements and ensure the report is issued — or co-issued with a registered valuer or merchant banker — so it actually holds legal water.
Diligence-proof documentation
Assumptions, comparables and workings are documented to the standard investor counsel and Big 4 diligence teams expect, so the number survives negotiation.
Multi-method triangulation
DCF, NAV and comparable multiples are reconciled rather than cherry-picked, giving you a defensible range as well as a point estimate for negotiation.
Tax surprises pre-empted
We test the proposed price against section 56(2)(x), section 50CA and ESOP perquisite rules before you sign, so nobody discovers a tax cost after the deal closes.
Post-issue support
Valuation questions arrive months later — from the AD bank, the assessing officer or a new investor — and we stand behind the report and respond.
Common DIY mistakes we see
- Reusing a months-old fundraising valuation for a new transaction — valuations are date- and purpose-specific, and regulators check both.
- Getting a Companies Act allotment priced on a CA certificate when section 247 requires an IBBI-registered valuer's report.
- Building DCF projections that show hockey-stick growth with no supporting pipeline, which diligence teams discount and tax officers attack.
- Ignoring the ESOP pool and convertible instruments when computing per-share value, overstating what each share is worth.
- Pricing a secondary between friends at face value and leaving the buyer with a section 56(2)(x) tax on the discount to fair market value.
Frequently asked questions
Usually DCF as the primary method for a growth-stage business, sanity-checked against comparable company multiples and NAV. The purpose can constrain the choice — some tax rules prescribe NAV, while FEMA accepts any internationally accepted methodology. We select and disclose the method in the report.
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All-inclusive professional fee. Government fees (if any) extra at actuals.
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