An Idea that delivers.

CA RAJIV SINGH
FCA, CISA(USA), LIII
FOUNDER EXPLICO
CONSULTING
rajivsinghfca@gmail.com

CA RAJIV SINGH 2013 -14

Valuation
Opportunities

What is the need & significance of

valuation?

Valuers Role

What is the role of valuer?

What makes one valuation plausible

Valuation Dubiety & the next completely unbelievable?
CA RAJIV SINGH 2013 -14

Valuation
Opportunities

What are the emerging segment in

valuation?

Valuation
Principle &
Practices

Why there is a need to review

counterfactual quality of valuation
by means of some aphorism?

Do we need
logician or number

Valuers Qualities cruncher?

CA RAJIV SINGH 2013 -14

 CA RAJIV SINGH 2013 -14

Two difference concepts determined and driven by different

forces
They would yield different numbers in most of the circumstances
Pricing process has mind of its own
Value of an asset is based on its fundamentals cash flow, growth
and risk
Price of an asset is based mainly on demand and supply forces

CA RAJIV SINGH 2013 -14

The deal price for Steve Ballmer to buy the Clippers finalized at $2
billion which is 12.1 times the expected 2014 revenues of the team,
as per numbers given to the bidders by Bank of America

Forbes valued the team at $575 million

A confidential Bank of America valuation report (disguised as Project

Claret valued the team much higher primarily due to projected

increases in media revenue. Before the bidding began, Bank of
America valued the Clippers between $1 billion and $1.3 billion

But BoAs estimated value is still a far cry from the price.
No team in the history of sports was sold for six times total revenues

before this deal and this gives an idea of how crazy this purchase price is
CA RAJIV SINGH 2013 -14

 CA RAJIV SINGH 2013 -14

Do you understand how the value

process works?
Do you understand how the pricing
process works?

(How the value

investors think)
(How traders
react to
information)

Which camp you belong to?

Investor Camp

Trading Camp

Value Camp

Pricing Camp

Can a successful value investor treat traders (pricers) with

CA RAJIV SINGH 2013 -14
disdain?

Nothing called precise value

Always precise

Not a static figure

A static figure

Arrival of a transaction is not

necessary
Fundamentals are the key

An outcome of a transaction
Fundamentals play a role in
determining both demand &
supply but not always.
MMI
(Mood,
Momentum
&
Irrational behavior) has a key
role in determining demand &
supply.

Includes economic and non

Always involves economic benefits
CA RAJIV SINGH 2013 -14
economic factors

 CA RAJIV SINGH 2013 -14

10

 CA RAJIV SINGH 2013 -14

11

(a)Date of Valuation
(b)Date of Valuation Report

(a) (b)

(a)

(b)

(b)

CA RAJIV SINGH 2013 -14

(a)

12

valuation standards
Best practices
Approaches , Methods and
Techniques

CA RAJIV SINGH 2013 -14

13

 Valuation dabbler
Malleable valuer

Objective driven valuation

Litigation driven valuation

Lowballing
Lock-step thinking

Multiple independent valuation

CA RAJIV SINGH 2013 -14

14

 Inappropriate of inadequate definition of valuation

Non adherence with valuation Dharma
Inadequate valuation processes
DNA of the business is not probed
Management projections untethered from reality
Art part of valuation plays major role
ESG (Environmental, social and Governance ) is not

considered
Value reconciliation and sniff test are ignored
CA RAJIV SINGH 2013 -14

15

Section
62(1)(c)
Section
192(2)
Section
230(3)/
232(2)(d)/23
2(3)(h)
CA RAJIV SINGH 2013 -14

16

Section
236(2)
Section
260(2)(1)
Section
281(1)(a)
Section
305(2)(d)
Section
319(3)(b)
CA RAJIV SINGH 2013 -14

17

 CA RAJIV SINGH 2013 -14

18