Transaction and valuation services in Delhi allow estimating the value of a company to carry out purchase and sale operations, mergers, capital increases, or any other type of transaction that requires decision-making at a strategic level.

First, transaction and valuation services in Delhi are key to differentiating between the price and the value of a company. Price is a target amount that the seller and buyer agree to move forward in a transaction. Instead, value is a subjective concept because the same company can have a different valuation for each of the parties.

For example, the price of the purchase and sale of a company will be in an average amount of the values ​​that each party has attributed to it. However, the transaction may eventually be closed at a higher price by the buyer’s valuation by conducting a thorough analysis of other factors (such as industry projections, economies of scale, etc.). 

What is the business valuation for?

Although the first operation that is usually thought of when talking about business valuation is the purchase or sale, this is not the only one. There are many other situations in which it is necessary to know the value of a company. Let’s see some cases: 

Trading on the stock market

Either to analyse is the price at which companies should be listed on the stock market, or for when a company wants to go public and must put an initial price on its shares, or for when we want to buy or sell shares of a company that listed on the stock exchange, they are decisions that are made after one or more valuation methods.

Exchanges between shareholders

The valuation of different companies that are shared by common corporate groups is very useful to establish and specify equations for the exchange of shares. 

Corporate continuity

It is key to assess the company to make strategic decisions regarding how to continue a business, what to sell, whether a merger is profitable, or whether or not it is convenient to continue obtaining cash flow from certain operations. 

Contests of creditors and arbitration processes

If a company is in default or going through some judicial process, it is important that it be fairly valued in order, for example, to pay compensation if applicable. 

Capital increases

If a company needs financing and has decided that carrying out a capital increase is the best way to do it, then it will be necessary to value the company to define how much money will enter the company in exchange for part of its shares. 

Stocks buying and selling

If a shareholder of a company is interested in selling their shares, then it will be necessary to value the company to define the amount that the one who buys will transfer to the one who sells. These are just some cases in which a company, no matter its size or its turnover levels, should apply methods to know the real value of the company.

This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.

Posted by:

CA Aman Aggarwal

AKGVG & Associates