Question ID : 28430

VALUATION OF EQUITY SHARES OF PRIVATE LIMITED COMPANY

As per New Valuation Guidelines (New Rule 11UAA) applicable on and from 01.04.2017, valuation of unquoted equity shares as on valuation date would be done following new formulae i.e (A+B+C+D-L)*(PV)(PE). The term “C” under above formulae is for valuation of Shares and securities, wherein it is provided under the guideline that FMV of Unquoted shares held by the company shall again be valued following the same above formulae. Now the question arises whether is it practically possible to calculate value of unquoted shares (unquoted shares subject to sale) of a company which has invested in suppose 10 other private limited companies and those 10 pvt. Ltd. companies have invested in further another 10 pvt. Ltd. companies and this goes on??? Kindly give me some advice on this.