Top 10 Best Valuation Firms In India In 2022
Business valuation businesses are similar to “choose your own adventure” games, let’s start with a high-level overview before choosing a specific path:
The State of Business Valuation: What Do firms Do?
As the name implies, valuation firms provide paid valuation services for a variety of situations, including Mergers and acquisitions (M&A) transactions, estate planning, employee stock ownership plans (ESOP), litigation, Fairness Opinions, and more.
The range of services is far more extensive than that of a normal investment bank. However, the job is usually an inch wide and a mile deep.
To put it another way, you could spend weeks appraising a single asset for a single company, all to support a minor component of a deal, lawsuit, or inheritance. On the other hand, work in investment banking is a mile wide but an inch deep: you’re running several deal processes, reacting to client demands, and dealing with miscellaneous chores all at once, but you don’t go into great detail on any one of them.
The following are examples of common assignments at valuation firms:
Valuation of a Private Company or an Employee Stock Ownership Plan – All private companies have shares. Still, their share prices are difficult to determine because they do not trade on public markets.
When private corporations give stock options to employees and need to figure out the right exercise price, they hire valuation agencies to do 409A valuations. These appraisals are also necessary when pending litigation or an existing shareholder sells their shares.
When an M&A transaction is completed, the buyer must “allocate the acquisition price” to various items and adjust the seller’s assets and liabilities to fair market value. It may also establish new assets like Goodwill and Other Intangibles to “bridge the gap” between the Equity Purchase Price and the seller’s Common Shareholders’ Equity, written down in the transaction.
Bankers treat this as an afterthought in their models, but valuation firms spend a lot of work valuing and re-valuing these assets because companies have to file precise numbers:
Goodwill Impairment Testing: If firm A paid $1 billion for firm B, creating $200 million in Goodwill in the process, and later firm B loses value, firm A must “write down” or “impair” the Goodwill to represent the loss of value.
Companies use valuation agencies to do these inspections regularly and determine the proper impairment.
Valuation of Private Equity Portfolio Companies: Private equity clients may use valuation services to double-check portfolio business valuations and ensure proper reporting. The entire portfolio’s value could vary if they disagree with a PE firm’s assumptions regarding the discount rate, valuation multiples, growth rates, or liquidity discount.
Estate and Gift Taxes – When a wealthy individual dies, their attorney may hire a valuation service to establish the value of the wealthy individual’s net assets. Based on this calculation, the government will collect estate taxes.
So… What Is “Business Valuation” and How Does It Work?
“Wow, this work sounds rather complicated,” you might think. “How does valuation work?” you could ask. Are there any fresh approaches? Are there any hidden tricks? “Is there any new, difficult math?”
Valuation is valuation: The term “valuation” refers to the process of determining the worth of something. You still employ unlevered free cash flow DCF models, valuation multiples based on comparable companies or transactions, and asset-based methodologies like liquidation valuation.
The difference is in the level of detail: timetables and assumptions that cover multiple spreadsheets instead of IB’s relatively basic methodology.
The concept of “math” is still limited to arithmetic and rudimentary statistics. (There is one exception: if your group appreciates complicated financial derivatives, the needed math level will rise.)
Aside from the level of detail, the aim of the task differs depending on the firm type and size. Valuation teams, for example, operate primarily to help audit teams at the Big 4 firms.
As a result, you devote a significant amount of time to analysing values from other companies so that the audit team can agree on specific financial statement line items, such as the stock-based compensation expense included on the income statement.
As an entry-level employee, this implies that you’ll be spending a lot more time on Excel than you would in investment banking.
The Best Valuation Companies
The Big 4 firms – Deloitte, E&Y, PwC, and KPMG – all undertake business valuation, although much of it is used to support their audit practice, as indicated above. Duff & Phelps is the largest independent valuation firm outside of them.
It provides compliance and regulatory consultancy, cyber risk evaluations, and restructuring advising services in addition to valuation. Houlihan Lokey is a top business valuation firm that also serves as a middle-market investment bank and provides deal advice. Stout Risius Ross, BDO, Grant Thornton, Willamette, Alvarez & Marsal, RSM, CBIZ, CohnReznick, MPI, VRC, Withum, Andersen, Baker Tilly, and Mercer Capital are some of the other firms.
Like Duff & Phelps, most of these organisations perform more than just appraisal, and many specialise in specific sectors. Alvarez & Marsal, for example, is well-known for turnaround consulting and restructuring services.
Then there are the boutique valuation businesses that specialise in specific areas or industries, which number in the dozens, if not hundreds.
Valuation Salaries, Bonuses, and Lifestyle
Salaries, bonuses, and lifestyle are all factors to consider while valuing a job. The total remuneration for entry-level positions at these companies is from $60K to $80K USD, with a bonus ranging from 0% to 25% of your primary income.
Yes, it’s a lot less money than investment banking, but the lifestyle compensates for it: you’ll typically work 40-50 hours per week.
Larger companies may have greater hours, but it will never be steady 80-hour-per-week work. Also, if you’re on a pure valuation team, you won’t be travelling nearly as much as someone on a “financial due diligence” team (FDD).
You may take a trip now and then, but you will not be out of the office every week. Non-Big-4 companies pay less than Big 4 companies, although the gap narrows as you move up the corporate ladder.
Partners and MDs at company valuation firms could earn in the low-to-mid-six-figure range (think $250K to $500K) at the highest levels.
The Big 4 businesses are more likely to start in the low-to-mid-six-figure area, but you should remember that Big 4 Partners tend to begin in the same low-to-mid-six-figure region.
To make $1 million in a Big 4 firm, you’ll need to bring in revenue that’s a multiple of your salary, such as $4-5 million per year, which may take years.
Is it Worthwhile to Pursue a Long-Term Career in Business Valuation?
Analyst, Associate, Vice President, Senior VP or Director, and Managing Director or Partner are the ranks in business valuation equivalent to those in investment banking.
Sometimes it’s more compact, with fewer individuals in the centre; for example, some companies only have analysts, vice presidents, and managing directors.
That’s because they don’t work on long-term deals that necessitate continual client touch. It becomes more of a sales function as you develop, where you must gain new clients and bring in extra tasks from existing clients to advance.
However, because the fees are cheaper and many tasks are “regular” and not contingent on large deals, there is less pressure than in IB.
Because they are susceptible to the economy, organisations that specialise in M&A and litigation assignments tend to have to change deal flow in terms of stability. As wealthy people die regardless of economic conditions, estate and gift tax groups are more challenging to navigate, and portfolio company valuation falls somewhere in the middle.
The basic trade-offs of this career path are straightforward: you make substantially less than you would in IB/PE, but you also work less and experience significantly less stress.
You also become a specialist rather than a generalist who works on various agreements in various businesses.
Recruiting at Valuation Firms
Recruiting is generally less competitive than in investment banking or private equity. You don’t have to start years ahead of time, you don’t have to have a perfect GPA, and you don’t have to go to one of the top universities.
Top state colleges, a few private business schools, several Ivy League schools, and some Master’s in Finance programmes are among the “target schools.” Most firms prefer recent undergrads and Master’s students with no work experience for entry-level positions; for jobs above that, you nearly always require valuation work experience.
MBA-level recruiting is also available, but it is less developed than other industries. It’s more typical for Associates and Senior Associates to enrol in MBA programmes to further their careers or for professionals in other fields to use an MBA to transition into the valuation.
You don’t have to do a lot of networking to get an interview, but if you do, you’ll stand out a lot more because it’s less usual. Another distinction is that certificates are arguably more helpful for professions involving business valuation.
There’s always the CFA, but there’s also the CPA, ABV (Accredited in Business Valuation), and ASA (American Society of Appraisers) certificates like the CEIV (Certified in Estate Valuation) (Certified in Entity and Intangible Valuations).
These all help to some extent, but they’re still less valuable than your professional experience, education, and even a small amount of networking.
If you want to follow any of them, start with the CFA because it is valuable in various industries. Finally, interviews are pretty similar to investment banking interviews, albeit with a more emphasis on accounting and valuation rather than M&A and LBO modelling.
So, while business valuation provides some potential exit options, transitioning into investment banking may be more challenging than anticipated (if that is your primary goal).
You must move swiftly – ideally within 1-2 years – and put up with garbage such as “modelling case studies” that are nothing more than Excel/PowerPoint formatting exams.
In addition, your exit options are determined by your team and client base.
The litigation team, for example, may have fewer chances than the ESOP team (which can lead to other audit/tax positions).
Working on purchase price allocations, portfolio business valuations, or M&A-related is suitable for moving into IB.
Your chances of landing a job in private equity or hedge funds are slim because those positions require more than just valuation abilities.
You must also be familiar with the complete deal process, or in the case of hedge funds, the entire investment process, catalysts, and risk mitigation strategies.
The Top 10 Best Valuation Firms in India in 2022 are listed below.
Especia is one of Delhi’s premier valuation experts, offering high-quality commercial services. It’s one of the bright spots that add convincing business value to the venture’s proposition. Especia is a significant provider of secretarial services, providing the most excellent solution to alleviate your business’s worries.
They work with their clients, assisting and regulating their operations. Especia has done more than 250 valuations for private, public, and trading companies.
Especia’s valuation services include:
- Business valuation
- ESOP valuation
- Deal Advisory and Investment Documentation
- fairness opinion
- RBI Valuation
- Income Tax Valuation
- SEBI Valuation
- Registered valuer
- Sweat Equity Valuation
- Ind AS Valuation
- Convertible Instrument Valuation
- DCF Valuation
- Intangible Valuation
- IBC Valuation consultants
- Brand valuation
- Startup Valuation
- Equity Valuation
- Valuation of shares
- M&A Valuation
- ESOPs & Sweat Equity
2. Axium Consulting Group
Axium Consulting Group, a company that provides engineering, manufacturing, and supply chain management services, was founded in Chennai, India, in 2014. The ever-increasing need to succeed, reach global standards in different Engineering areas, and innovate has created a gap in the market for dependable partners willing to work hands-on and deliver.
Vission: To be the preferred partner in engineering, manufacturing, and supply chain management.
Mission: To provide customers with high-quality services delivered on time, resulting in a value proposition in the linked field and boosting their competitiveness.
Team: In Engineering Services & Solutions, their team combines knowledge, field experience, and a thorough grasp of the market and clients.
Colliers is one of the greatest valuation firms globally, with operations in over 65 countries and 26 years of experience. They make the most of the property’s potential to boost your company’s performance and growth.
Colliers provides following service:
- Real estate valuation- Colliers Team delivers a solution to your real estate and business difficulties by reporting the client’s business requirements.
- Plant and Machinery Valuation – This company offers various equipment valuation services for a variety of purposes.
- Technical Due Diligence– It assets project monitoring, Budget review, technical feasibility and audit of the projects. Colliers provide the best TDDs services.
4. Knight Frank
It is one of the greatest appraisals and advisory services available. Some of the clients it works with are developers, private equity funds, financial institutions, governments, public sector companies, industrial development, corporations, hotels, and high-net-worth people.
They provide a variety of services:
- Real estate valuation
- Plant and machinery valuation – It provides Lenders and Investors engineering services.
- Company valuation – Provide In-depth experience in techniques and different strategies.
- Litigation support
GAA has a knowledgeable team that can help you with your valuation. The GAA has offices in numerous cities across India, including Delhi, Gurugram, Mumbai, and Bangalore.
They give services that are:
- Valuation consultancy
- Business & Business Interest
- Intangible Assets
- Financial Instruments
- Immovable Assets – Immovable Assets include real estate.
- Movable Assets- It includes Plant and Machinery.
6. BDO INDIA
It aids in the comprehension of needs and shareholders. It offers services based on the preferences of the client. It offers 360-degree views of valuation services in cities across India, including Ahmedabad, Bengaluru, Chennai, Delhi, Goa, Hyderabad, Kochi, Kolkata, Goregaon, Mumbai, and Pune.
BDO India offers the following services:
- Business valuation- BDO India handles income tax, RBI issues, SEBI, corporate restructuring mergers, acquisition-related valuation, and the Companies Act.
- Financial Reporting Value- BDO India is a venture capitalist dealing with purchase price allocation, fixed asset valuation, impairment test, and financial instruments.
- Specialised valuation deals with a family settlement, claim for damages value, expert evidence, and real estate valuation, among other things.
- Intangible Assets are the fourth type of asset.
- Liquidation Value, Arbitration, and Dispute Resolution
7. Duff & Phelps
Duff & Phelps has been providing business appraisal services for nearly a century. Duff & Phelps has offices in Hyderabad, New Delhi, and Mumbai in India. It provides a foundational understanding as well as excellent industrial recommendations. The investment of capital based on returns is the subject of business valuation.
They offer a variety of services:
- Purchase price allocation
- Derivatives valuation and shares based compensation
- fresh start accounting
- strategic value advisory
- tax valuation
- machinery and equipment valuation
- Intangible asset impairment
8. Virtual Auditor
Virtual Auditor is a tech-driven firm that assists startups with registration, compliance, and regulatory aspects. They also help startups with fundraising, business modelling, startup valuations, and Virtual CFO Services and technology consulting, allowing them to access the internet and participate in the Digital India revolution.
Virtual Auditor goal is to free up entrepreneurs to focus on what they do best: running their businesses. They will handle compliance and regulatory issues.
Their motto is: “Your Aspirations We take care of everything from registration to business valuation, compliances, and technology on our platform so you may pursue your entrepreneurial aspirations.”
Virtual Auditor is a one-stop-shop for business formation, company registration, and corporate services. The company is run by a specialised team of Chartered Accountants, Company Secretaries, Registered Valuers, and Management Professionals. They are dedicated to providing excellent prospects to our clients across the board.
9. FIN VAL RESEARCH & CONSULTANCY
FinVal Research & Consultancy is a professional services firm that specialises in offering world-class research, financial modelling, valuations, and corporate finance to start-ups and early-stage businesses. They deliver high-value customised economic research and accounting services to many global clients, including major and medium-sized corporations and financial services businesses.
FinVal Research headquarters are located in New Delhi, India. They have a team of skilled professionals, including Chartered Accountants and MBAs from top universities, who are overseen by a senior management team that is highly experienced and client-focused.
Their services are divided into three functional categories:
- Startup Services
- Financial and Investment Research
- CFO Solutions
10. Dk Nagpal & Association
DK Nagpal & Associates is a real estate evaluation and consultancy firm based in India specialising in analysing and valuing real estate.
DK Nagpal and Associates is one of the most reputable real estate valuation firms with extensive experience and a strong foundation in the sector.
They may provide services across the entire valuation spectrum, including:
- Techno-Commercial Study
- Real Estate Advisory
- Corporate Advisory
- Funding Proposal
- Plant and Machinery Valuation
- CE Certification
- LIE Reports
- Business Valuation
- Capital Gain Valuation
- Mortgage Valuation
- Dispute Resolution Valuation
Final Thoughts on Business Valuation Careers
In light of the preceding, here’s how you might consider a career with a valuation firm:
- If you had a late start in finance, business valuation is an excellent “Plan B”; recruiting is also less competitive than the IB/PE procedure.
- You’ll get abilities that are immediately applicable to other areas of finance, and you’ll study more about valuation than you would in IB/PE.
- It’s an excellent professional path that can pay into the mid-six-figure range at the top while still allowing you to live comfortably.
- Compensation is much lower at all levels than in IB/PE.
- If you want to go into a deal-based function, you’ll need to grasp the process and M&A/LBO modelling because you won’t receive much exposure to exclusive deals.
- Climbing the corporate ladder is challenging since many others want to “rough it out,” and turnover is generally lower than at banks.
- If you’re on the wrong team or wait too long to leave the industry, your options for exit will be more limited.
Business valuation is one of the most underappreciated aspects of finance. It may not be as “prestigious” as other fields, but it serves as a good backup plan, stepping into other areas and a long-term career strategy.
Edited and published by Ashlyn Joy