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Preferential Allotment Valuation

Independent Valuation for Preferential Issue of Securities and Regulatory Compliance

A preferential allotment enables a company to issue equity shares or other securities to a select group of investors, promoters, strategic partners, or existing shareholders. An independent valuation is essential to determine a fair issue price, ensure regulatory compliance, and provide transparency to all stakeholders. Our experts provide independent and reliable valuation services for preferential allotments in accordance with the Companies Act, 2013, SEBI Regulations, the Foreign Exchange Management Act (FEMA), and other applicable laws and regulatory requirements, delivering well-supported valuation reports that facilitate compliant and informed capital-raising transactions.

What is a Preferential Allotment Valuation?

Preferential Allotment Valuation is the process of determining the fair value of equity shares or other securities proposed to be issued through a preferential allotment. An independent valuation helps establish a fair and justifiable issue price, supporting capital raising, strategic investments, promoter capital infusions, and business expansion while ensuring compliance with the Companies Act, 2013, SEBI Regulations, FEMA, and other applicable regulatory requirements.
  • Capital Raising
  • Strategic Investments
  • Promoter Capital Infusion
  • Private Placement of Securities
  • Conversion of Securities

What Decision are you making?

Choose the capital raising or share issuance transaction you're planning. Our independent valuation services help determine fair issue prices while ensuring compliance with the Companies Act, FEMA, RBI pricing guidelines, and other applicable regulatory requirements.

Designed for companies, promoters, investors, CFOs, merchant bankers, legal advisors, and corporate professionals managing capital raising and preferential allotment transactions.
01

Capital Raising

Determines the fair issue price of equity shares or other securities issued to raise capital for business expansion, acquisitions, working capital, or strategic initiatives.

02

Strategic Investments

Supports the issuance of securities to strategic investors, private equity funds, venture capital funds, and institutional investors through an independent valuation.

03

Promoter Capital Infusion

Provides valuation support where promoters subscribe to additional shares through a preferential allotment to strengthen the company's capital base.

04

Private Placement of Securities

Determines the fair value of equity shares, preference shares, convertible debentures, warrants, and other securities issued through a private placement.

05

Conversion of Securities

Supports valuation for the conversion of preference shares, debentures, warrants, and other convertible instruments into equity shares.

06

FEMA Compliance

Provides valuation for preferential allotments involving resident and non-resident investors in accordance with the Foreign Exchange Management Act (FEMA), Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, and RBI pricing guidelines.

Our Valuation Methods, Simplified

90 Trading Days / 10 Trading Days Pricing Method (SEBI ICDR)

For listed companies, the minimum issue price for a preferential allotment is determined in accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, based on the higher of:

the volume weighted average price (VWAP) of the related equity shares during the 90 trading days preceding the relevant date; or

the volume weighted average price (VWAP) during the 10 trading days preceding the relevant date.

Discounted Cash Flow (DCF) Method

Determines the fair value of the company by estimating the present value of its expected future cash flows. Commonly used for unlisted companies and FEMA pricing requirements.

Market Approach

Estimates value using valuation multiples derived from comparable listed companies and market transactions.

Guideline Company Method

Determines value by applying valuation multiples of comparable publicly listed companies operating in similar industries.

Guideline Transaction Method

Determines value using pricing multiples observed in comparable investment and acquisition transactions.

Net Asset Value (NAV) Method

Determines value based on the fair value of the company's underlying assets less liabilities, particularly for investment holding and asset-intensive companies.

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defensible, precise value
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