How To Determine The Valuation of Metropolitan Stock Exchange of India Ltd’s Unlisted Shares?
The market value of the equity is the underlying concept for the valuation of the equity. Listing in an established system providing a strong basis for the valuation of listed equity.
Nevertheless, it can be more difficult to assess the market valuation of unlisted shares and illiquid equities. That being said if you’re trying to invest in the Metropolitan Stock Exchange of India Ltd (MSEI)’s unlisted shares, there are a variety of valuation approaches you can use.
The choice of the method relies largely on the availability of evidence to justify the implementation of the method. In fact, one or more of these approaches may be ruled out because of a lack of evidence sufficient to justify the application of the tool.
So, here are some of the most efficient ways to determine the value, and based on the information available to you, you can choose your preferred option.
1. Recent Transaction Price
Unlisted equities can be traded from time to time, and current rates at which the equities sold may be used. The price of the sale shall be the price ‘arm’s length’ between the individual customer and the seller, where no side is under coercion or duty to partake in the transaction.
More recent purchases are preferred because it is desirable that the transaction could have taken place in the last year. Though the most recent transactions are more than one year ago, compilers may wish to suggest an alternative process.
2. Own Funds At Book Value
Own Book Value Financing (OFBV) includes determining the value of an organisation that appears in its accounts in compliance with International Accounting Principles.
OFBV is based on the accounts of the direct investment firm and can be seen as shareholder equity on the balance sheet. The OFBV concept includes paid-up cash, all forms of assets and the net value of non-distributed gains and losses (including result for the current year).
International Accounting Principles require that most investments be revalued at least on an annual basis. A capitalization ratio can be measured and implemented (with or without liquidity adjustments) if adequate information is available.
3. Net Asset Value (NAV), Including Goodwill And Identified Intangibles
Net asset value (NAV) is total assets at present/market value minus total liabilities (excluding equity) at market value.
In this accounting process, both financial and non-financial assets and liabilities of the enterprise, including intangible assets, are shown in terms of current period rates. Valuations can be based on very current reviews — definitely within the past year.
Appraisals can be performed by the competent managers or directors of the company, and/or by independent assessors. A capitalization ratio can be measured and implemented (with or without liquidity adjustments) if adequate information is available (see market capitalisation method).
4. Net Asset Value (NAV) Excluding Goodwill And Identified Intangible Assets
In this accounting process, both financial and non-financial assets and liabilities of the enterprise, except intangible assets, are seen in terms of current period rates. Valuations can be based on very current reviews — definitely within the past year. Appraisals can be performed by the competent managers or directors of the company, and/or by independent assessors.
While most of these options are viable, accurate data is key to carrying them out efficiently. To obtain this data, you need to rely on a credible source like Unlisted Deal to provide all necessary information. Along with this data, you can also get an understanding of the current Metropolitan stock exchange share price and other predictions related to the company to make an informed decision.
