Valuation of shares

udit sharma (Company Secretary) (2303 Points)

26 November 2010  
Dear Friends

X Ltd (an unlisted co) is a JV between an Indian partner (say A Ltd 50% ) and a Foreign Partner (Say B Ltd 50%). X Ltd has two more subsidiaries in India say Y Ltd and Z Ltd. X Ltd has given certain amount as share application to both the subsidiary companies.

As per the current Master Circular on FDI, price of shares issued to non resident investors shall be as per the DCF method in case of unlisted companies.

Now my query is which method should be adopted by the two subsidiaries of X Ltd (viz Y and Z Ltd) for valuation of shares ??

Do the above provisions of RBI (FEMA) apply to these companies ??

Pl reply
rgds