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Pricing Formula for Preferential Issue by Unlisted Company

Leonel (Service) (84 Points)

03 June 2008

Hi All

Kindly quote with any justification what is the pricing formula of the shares in case an unlisted company is issuing preference share / making preferential allotment?

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9 Replies

Abhishek Agarwal (EXCEL EXPERT) (92 Points)
Replied 03 June 2008

cci guidelines for valuation is a method which can be used . the file is in others section with the name "cci guidelines for valuation" in pdf format.

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Leonel (Service) (84 Points)
Replied 03 June 2008

Abhishek

Though CCI Guidelines have now been abolished , Is it feasible to still refer CCI guidelines.

Abhishek Agarwal (EXCEL EXPERT) (92 Points)
Replied 05 June 2008

i AM SAYING , IT IS ONE OF THE METHODS. This is a problem in valuation of private ltd companies. we inour companies are getting it valued through Professional CA firms.

But the method will be book value or DCF (Discounted Cash flow method ) or if a peer company is listed , then its PE & EPS multiple.

Ankit kansal (Professional) (43 Points)
Replied 05 June 2008

dear friends,

Plese read the guidence issued by SEBI on the pricing formula.

Regards,

Ankit Kansal

Mohit Sureka (CS, final CA) (213 Points)
Replied 09 June 2008

U can also refer Sujal Shah's paper on Valuation - Using PECV, NAV n DCF methods....

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CA NP Mathi Lingan (Practising Chartered Accountant) (98 Points)
Replied 10 June 2008

Dear Leonel,

Comply with the provisions of Sec 81 regarding special resolution or Central Govt's approval as the case may be.

The shareholders while passing the special resolution may decide upon the price.

Normally only If the shares are issued to some outside parties based on some subscripttion agreement as a means of raising funds the Co's adopt some valuation methodology mutually agreed to between the parties.

CA NP Mathi Lingan (Practising Chartered Accountant) (98 Points)
Replied 10 June 2008

Also refer "Unlisted Public Companies (Preferential Allotment) Rules, 2003"

(Guest)

I want to know the pricing formula for preferential issue by unlisted company

Preety (Company Secretary) (96 Points)
Replied 03 May 2010

Hello Friends,

My Co. is listed in DSE.We are plannig to do Prefential Allotment .Can anyone pl tell the detailed procedure for the same . Also pl tell me , is there any time gap required for bringing IPO after making prefential Allotment or Co. can anytime after Prefential Allotment come up with IPO.

Thanks in advance

Regards

Preety