Your Knowledge Partner!

Valuation of shares of unlisted company

Mercantile Laws | Contract Act | Partnership | Arbitration | Foreign Trade | FEMA | RBI | Negotiable Instruments | Banking | STPI | SEZ | DoT | Arbitration Insurance | Stocks & Securities etc.

Moderators: srinivasaraghavan, feele, sumitpahwa

Valuation of shares of unlisted company

Postby yogeshbansal » Wed May 27, 2009 11:02 am

A Pvt. Ltd. has issued its shares @ 200/- ( rs. 10/- face value, 190/-premium) and the fair value of share is 16 rupees as per CCI guidelines. As per CCI guidelines company cannot issue share less than Rs. 16/-. Now, company has to submit ca certificate indicating the manner of arriving at the price of share issued to the person outside India. wht is the format of ca certificate and why rbi requirs this certificate.
Professional eMind !
Posts: 31
Joined: Fri Mar 27, 2009 12:44 pm

Re: Valuation of shares of unlisted company

Postby pca » Wed May 27, 2009 1:39 pm

As desired, draft of CA certificate is attached which can be modified suitably as per your requirement.

CA certificate.doc
(23 KiB) Downloaded 2355 times
PC Agrawal
Aurangabad (Maharashtra)
Knowledge Guru
Posts: 1124
Joined: Sun Jul 08, 2007 9:35 am
Location: Aurangabad (Maharashtra)

Re: Valuation of shares of unlisted company

Postby amarkakaria » Wed May 27, 2009 5:45 pm

Hi Yogesh,

As you are aware, CCI guidelines prescribes minimum issue price at which shares can be allotted to non-residents. In order to protect interests of existing shareholders, CCI guidelines contained a mechanism to determine minimum share price using different valuation methods. However, there was no cap on the upper side and based on negotiations as well as interest of the investor, the shares can be issued at higher valuation.

In the given case, though ideal share price is Rs 16, the Company has issued shares at Rs 400... thanks to tough negotiations by existing management with the investors. CA certificate will have a mention about the same.

Mr Agrawal has already given you draft of CA certificate which can be used by you.
Warm Regards,
Amar Kakaria
Expert eMind !
Posts: 394
Joined: Fri Jul 13, 2007 2:29 pm
Location: Mumbai

Return to Commercial Law, FEMA & RBI

Who is online

Registered users: Bing [Bot], Google [Bot]

eMinds Legal Counsulting Pvt. Ltd.
D-126, 2nd Floor, Sector 56,
Gurgaon -122011, India,

(O): +91 11 426 0141

(E) : info@emindslegal.com
(W): www.emindslegal.com


Registration to both the below newsletters is free and entitles you to receive 1 mail per day. We don’t Spam and you can unsubscribe anytime.

Corporate Law Reporter -  the daily journal

We regularly send legal updates related to Corporate Laws, FEMA, Compliances and Direct & Indirect Taxation.

Click here to register your email id for Daily Legal updates from Corporate Law Reporter - the Daily Journal.

feeleminds.com discussion forums

Click here to Subscribe to feeleminds discussion forums to get the gist of all discussions exchanged during the day

Our Service Offerings:


Follow us on

This legal update is the copyright of eMinds Legal. The update is not intended to be a form of solicitation or advertising. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate thereafter. No person should act on such information without appropriate professional advice based on the circumstances of a particular situation.