What do you mean by Enterprise value under SEBI Takeover code ? From the given information, calculate the Enterprise value of KRS Ltd. : Outstanding equity share capital ₹1,600 lakh (par value per share ₹2) Market price

CS Executive · Securities Laws and Capital Markets · PYQS · June 2021
What do you mean by Enterprise value under SEBI Takeover code ? From the given information, calculate the Enterprise value of KRS Ltd. : Outstanding equity share capital ₹1,600 lakh (par value per share ₹2) Market price per share on closing date (equity share): ₹125 Reserves & Surplus ₹195 lakh, Minority interest ₹275 lakh, Preference share capital ₹4,200 lakh, Cash-in-hand ₹72 lakh, Cash equivalent ₹63 lakh, Other current assets ₹1,965 lakh.

Answer & Explanation:

As per SEBI Takeover Regulations, Enterprise value means the value calculated as market capitalization of a company plus debt, minority interest and preferred shares, minus total cash and cash equivalents. Calculation of Enterprise value of KRS Ltd. Enterprise Value = Market capitalization + Debt + Minority Interest + Preferred Shares - Total Cash and Cash Equivalents Number of equity shares = 1600 lakh / 2 i.e. 800 lakh Market Capitalization = 800 lakh x ₹125 i.e. ₹1,00,000 lakh Enterprise Value = ₹1,00,000 lakh + ₹275 lakh + ₹4200 lakh - (₹72 lakh + ₹63 lakh) Enterprise Value = ₹1,04,340 lakh

Topics: Takeover Regulations

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