VALUATION OF CORPORATE RESTRUCTURING COMPANIES THROUGH FINANCIAL MODELLING

“VALUATION OF CORPORATE RESTRUCTURING COMPANIES THROUGH FINANCIAL MODELLING”

DR. AMISH B SONI, MS. DISHA NATHVANI

ABSTRACT
Corporate restructuring and Valuation are one of the up-to-the-minute topics in finance world. Every now and then companies restructure their forms of existence. These could be in the form of Merger, Acquisition, Amalgamation, Leverage Buy Out (LBO), Buyback, Initial Public Offering (IPO), Demerger, Divestment, Consolidation, Carve-Out, Joint Venture, Reduction of Capital, Delisting, Takeover etc. And in this study, these all forms are presented conceptually. Apart from this, to analyse the performance of different companies’ different valuation tools like Weighted Average Cost of Capital (WACC), Economic Value Added (EVA), Book Value of Assets, Discounted Cash Flow (DCF), Exchange (Swap) ratio, Different valuation ratios, DuPont analysis, The Capital Asset Pricing Model (CAPM), ANOVA, R Square and Regression analysis are used. To understand in depth about this topic real life companies’ examples are taken in this research. This study focuses mainly on four sectors i.e., Banking, IT, Steel &Iron and FMCG. And from every sector five companies are taken under the objective of understanding the concepts about corporate restructuring and valuation through different techniques and excel models. So, for this purpose five years data of pre, during and post corporate restructuring is taken from the data of 2012-2022. In this study, it is found that mega actions of corporate restructuring affect company financially and economically and these actions not affect only companies but also affect its shareholders wealth. In this study, it is found out that how company’s performance changes after corporate restructuring actions and how investors interpret it for their valuable investment.

Key Words: Corporate Restructuring, Valuation Models, Financial Modelling, Excel Valuation Model