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Valuation of debentures for issue of debentures to nri

Others 1803 views 1 replies

Hello Friends

For issue of shares to a non-resident, shares of the company should be valued as per Discounted Cash flow method (RBI guidelines).

If debentures (convettible/non-convertible) are issued to a non-resident, then how to value the debentures? Is there any valuation method should be adopted for valuing debentures?

Kindly suggest..

Thanks in advance

Replies (1)

Dear Damu,

Shares have intrinsic value apart from face value.  When any person or company intends to acquire shares or company wants to issue existing or new shares to others shall have to value its shares as per the guidelines or as agreed by both the parties. 

Debentures carry no intrinsic value but offers a predermined percentage of interest, hence requires no valuation as interest is paid on face value.

 


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