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Complex securities often contain multiple contractual features such as conversion rights, redemption options, preferential rights, embedded derivatives, or performance-linked payoffs, making their valuation more sophisticated than plain equity or debt instruments. We provide independent valuation services for complex securities using appropriate financial models and valuation techniques, supporting Ind AS 109, Ind AS 113, Ind AS 32, SEBI, FEMA, and other applicable regulatory and financial reporting requirements.
Independent valuation of complex financial instruments based on their contractual terms, embedded features, market conditions, and applicable valuation standards.
Valuation of CCPS, CCDs, convertible preference shares, convertible debentures, and other instruments having equity conversion features.
Determination of fair value of warrants, share options, and other instruments providing rights to acquire equity securities.
Valuation of securities containing mandatory or optional conversion features with different payoff structures.
Valuation of debt instruments incorporating embedded options, variable returns, or other complex contractual features.
Valuation of securities containing issuer or investor redemption, put, or call rights.
Valuation of preference shares incorporating preferential dividends, liquidation preferences, conversion rights, or redemption features.
Valuation of consideration linked to future business performance, revenue, EBITDA, milestones, or other specified conditions.
Fair value measurement of employee stock options, stock appreciation rights, and other equity-settled or cash-settled instruments.
Identification and valuation of embedded derivatives arising from contractual arrangements and financial instruments.
Fair value measurement and valuation support for financial instruments under Ind AS 109 and Ind AS 113.
Our complex securities valuation process combines an understanding of the instrument's contractual features with appropriate financial models, market inputs, and applicable valuation frameworks.
Understand the instrument's commercial and contractual terms, analyse the underlying security and transaction structure, and identify embedded options, derivatives, and other significant features.
Determine the appropriate valuation framework and unit of account, assess relevant market inputs including volatility, interest rates, credit spreads, and risk factors, and select and apply the appropriate valuation model.
Perform sensitivity and scenario analysis wherever required, determine the fair value, and prepare a comprehensive valuation report supporting financial reporting and regulatory requirements.
Used for securities containing option-like features such as conversion, warrants, puts, calls, and other contingent rights.
Values instruments where the payoff depends on multiple possible future movements in the underlying asset.
Commonly used for valuing certain equity options, warrants, and other option-like instruments where the underlying assumptions are appropriate.
Used for complex securities where the payoff depends on multiple variables or requires simulation of different future scenarios.
Values debt and other cash-flow-based instruments by discounting expected future cash flows using an appropriate risk-adjusted discount rate.
Values securities by considering multiple future scenarios and assigning probabilities to different potential outcomes.
Used in appropriate circumstances, particularly for certain early-stage or highly structured capital structures where value is allocated based on current enterprise value and contractual preferences.
Our complex securities valuations may consider the following accounting, regulatory, tax, and financial reporting requirements, as applicable.
Ind AS 109 – Financial Instruments, Ind AS 113 – Fair Value Measurement, Ind AS 32 – Financial Instruments: Presentation, and Ind AS 102 – Share-Based Payment.
Applicable SEBI Regulations and FEMA and RBI pricing guidelines, where applicable to the relevant transaction or financial instrument.
Companies Act, 2013, along with applicable tax and financial reporting requirements relevant to the valuation assignment.
Answers for business owners who want to understand the process before speaking with an expert.
Complex securities are financial instruments containing multiple contractual features or embedded rights that make their valuation more sophisticated than ordinary equity or debt instruments.
These may include CCPS, CCDs, convertible debentures, warrants, preference shares, structured debt, options, earn-outs, contingent consideration, and instruments containing embedded derivatives.
Depending on the instrument, models such as Black-Scholes, Binomial/Lattice, Monte Carlo Simulation, PWERM, CVM, and DCF may be used
It may be required for financial reporting, fundraising, M&A transactions, ESOP accounting, investment transactions, regulatory compliance, tax purposes, and transaction structuring.
The model is selected based on the contractual features of the instrument, underlying asset, expected payoff, market data availability, volatility, credit risk, and applicable accounting or regulatory requirements.
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