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Valuation of shares of unlisted company

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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.
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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.

Thanks
Attachments
CA certificate.doc
(23 KiB) Downloaded 2355 times
PC Agrawal
Aurangabad (Maharashtra)
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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
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