Corporate Restructuring and Valuation

Module

No:

Contents

No. of

Sessions

70 Marks

(External

Evaluation

I

Corporate Restructuring: Concept, Reasons for Restructuring, Barriers to Restructuring, Types of Corporate Restructuring.

Expansion: Amalgamation, Absorption, Asset Acquisition/Mergers & Acquisitions- Concept, Classification of Mergers, Motives Behind M&A, Reasons for Failure, Reverse Merger, Recent Examples of M&A in India, Concept of Acquisition and Types of Acquisitions. Joint Venture- Types, benefits, Cross Border Expansion- Reasons, Benefits. Contraction: Spinoff, Split-ups, Equity Carve Out, Divestiture/ Asset sale- Concept, Benefits, Types of Divesture, Reasons for Divesture.

Corporate Controls: Going Private, Buyback, Leveraged Buyouts- Concept, Types of LBOs, Takeover and Anti-takeover Defence- Concept, Takeover Defence Tactics, Benefits and Disadvantages of Takeover, ESOPs- Concept (only theory).

Due Diligence: Concept, types of Due Diligence.

10

17

II

Basics of Business Valuation: Introduction, Purpose of Valuation, Role of Valuation, Key, Concepts of Value: Market Value, Book Value, Liquidation, Value Intrinsic Value, Replacement Value, Fair Value, Valuation Process. Overview of Various Approaches to Valuation (Theory & Numerical).

Asset Based Valuation: Net Asset Method- Book Value Basis, Market Value Basis, Liquidation Value Basis.

Income Based Valuation: Discounted Cash Flow Method- Equity Valuation and Firm Valuation, Covering Stable Growth and Two Stage, Growth (FCFE and FCFF Models), Dividend Yield Method, Capitalization Method.

10

18

III

Market Based Valuation: (Theory & Numerical) Comparable Company and Transaction Analysis Method, Fair Value Method.

Valuation Using Multiples: (Theory & Numerical) Earnings Based Approach (Earnings Capitalization Method, EPS, MPS, P/E Ratio),

Exchange Ratio and Synergy: (Theory & Numerical) Concept, ER based on EPS, MPS, PE, Combined EPS, Combined MPS, Combined PE, Minimum and Maximum Exchange Ratio Based on

MPS and EPS, Market Value of Merged Firm, Cost and Benefits of a Merger.

10

18

IV

Overview of Valuation of Intangible Assets (Only Theory) Definition of Intangibles, Reasons to Conduct Intangible, Valuation, Recognition, Valuation of Goodwill, Brands and Human Resource.

Accounting for Mergers: AS14, Methods of Accounting, Balance Sheet Treatments after M & A.

Discussion on the Practical Ecosystem for Corporate, Restructuring Through Real Indian Cases Such as Split of Reliance Industries Limited, RIL-RPL Merger, ICICI-ICICI, Bank Merger, LIC-IDBI Bank, IDBI-IDBI Bank etc.

10

17

V

Practical: Various Case Studies on Enterprise Valuation, A Case Report Correlating the Theories and Valuation Model Must be Prepared by Using the Data and Example of M&A Deals Occurred in the Past. (For Preparing this Case Report, any Sector and any Deal Pertaining to that Sector can be Taken as per Choice and Discretion).

---

(30 marks

CEC)