BHAGWAN MAHAVIR COLLEGE OF MANAGEMENT PRESENTATION

BUSINESS VALUATION OF WIPRO

PREPARED BY:PATEL BIREN TRIVADI VIKAS RANA KALPESH VASAVA NAYAN TAILOR JIGNESH SALEH ARIF ON

GUIDED BY:Prof. Ms. Drashti Shah (Strategic Financial management)

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About Wipro
Company Name : Wipro, Ltd. Headquarter : Bangalore Website : www.wipro.com CEO : Mr. Azim H. Premji No. of Employees : 126,490 Business Description : Wipro, Ltd. is a global IT

services company, which provides outsourced research and development, infrastructure outsourcing and business consulting services.
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 Wipro's Global IT business caters to more

than 150 global Fortune 500 clients across financial services, retail, transportation, manufacturing, healthcare services, energy and utilities, technology, telecom and media. We employ over 120,000 people from over 70 nationalities and 72 plus global delivery centers across 5 continents.

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BUSINESS VALUATION METHODS

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Meaning
Business Valuation has become an intrinsic

part of the corporate landscape. The corporate landscape has witnessed dynamic changes in the recent years as mergers and acquisitions, corporate restructurings, and share repurchases are happening in record numbers, both in the United States and abroad. At the core of the dynamics of all these activities stands some notion of valuation. The valuation methods are not only necessary for accounting purposes but they also serve asroadmaps for the angel investors, venture capitalists 5/2/12 corporate and acquirers in order to know the true value of a

Financial data...
Crore)
Equity share capital : 490.8 Net block : 4,237.00 Capital work-in-progress : 603.1 Investments : 10,813.40

(Rs. In

Current assets, loans & advances : 18,466.30 current liabilities & provisions : 8,054.80 Number of equity shares outstanding (Lacs) :

24544.09

Year 2011 2010 2009 Preference dividend : 490.8 2008 2007

Industry rate : 25% (Assumed)

Profit 4902. 4456. 3922. 3063. 2842. 5/2/12 70 90 40 30 10

Assets Based valuation

The Asset Approach (Intrinsic Value) is based

on the premise that it is generally possible to liquidate the property, plant and equipment (PP&E) assets of a company, and after paying off the company's liabilities the net proceeds would accrue to the equity of the company. Valuation of assets based on liquidity does not yield better results if the fair market value of assets is in excess of value of its assets on a liquidated basis. Net Assets Available to Equity Share 5/2/12 holders

Calculation
Particulars Fixed assts (Net Block) Investments
Rs. In Cr.

4237.00

10813.4 0 Capital Work- in -Progress 603.10 Current Assets 18466.3 0 Less) Current Liabilities 8054.80 Intrinsic value Per Share = 25574.20/245.4409 = Rs. 104.20 Net Assets 26065.0 0 Value of company = 104.2 * 245.4409 = Rs. 25574.941 cr 5/2/12 Less) Preference Dividend 490.80

Earning Yield Methods

The

total amount of profit belongs to shareholders, whether distributed as dividend or not. The undistributed profit used to finance the growth of business helps to increase the value of the shares, and is just as much a part of the shareholders return on the investment as the dividend. The value of company on the earning yield basis is the value of the stream of profit or earnings with the company is expected to generate.

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Calculation of an EYM involves 3 steps : Step 1 : predict the future maintainable profit of

the company being valued.

Step 2: Identify the required earning yield by

reference to the result of similar company.

Step 3: Apply the earning yield to future profit

using following formula

Value of business = companys expected future

profits yield Industries normal earning

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Calculation
particular Total Profits of Last 5 Years Less) Dep. Profits after Dep. Amount 19187.40 3542.30 15645.10

Number of Years 5 Average Profits 3129.02 Companies ROR = Excepted Profits / Eq. Less) Pref. Share Div. 490.80 Capital * 100 Profits Available to Equity share holders 2638.22 Value = 2638.22/490.8 * 100 per Share = Companies ROR/ Industries = 5.3753463% Normal rate * Paid up value = 5.3753463/ 3.8 * 10 Value = company = 14.15 * 245.4409 = of Rs. 14.15 5/2/12 Rs. 3473 cr

Bibliography
Books : Strategic Financial Management by Ravi M. Kishor

Website :www.wipro.com www.moneycontrol.com www.rediff.com www.moneycontrol.com/Financials/wipro/Balance-

sheet/w

www.scribd.com/doc/3067909/company-valuation#

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Thank You...
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