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| Case Study 4 |
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- OBJECTIVE:
Due diligence with valuation of a leading web-based telecom and IT major of India
- BRIEF:
A private equity player is considering acquiring stakes in a web-based advertising and telecommunication company. The stake will be in the form of GDRs which the company plans to list at one of the European Stock Exchanges.
- ACTION:
Planman Consulting's Global Strategy & Investment Consulting division was hired to execute the study and account for required information.
- APPROACH:
The project was a secondary research assignment where GSIC had to review the Indian web-based advertising and telecommunication services sector and do a meticulous study with respect to the company.
- REQUISITES: The client required the following:
- Market and industry outlook
- Viability of the business model
- Competitive landscape
- Valuation target
- METHODOLOGY:
A detailed discussion with the client regarding the project was soon followed up with a comprehensive overview of the related industry and the company. Each segment of the project was planned and executed by specialists. Correlation in the process and contents was essentially focused upon. The data mining was complex as specific information had to be garnered pertaining the on-line advertising industry in telecom services in India.
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OUTCOME: The overall outcome of the project entailed the following:
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Deliverables - A comprehensive report which entailed:
- Company's operations and service domains
- Company background
- Industry overview
- Revenue Model and trends
- Opportunities and threats
- Valuation (DCF and Relative)
- GSIC’s recommendations
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Result - The analysis suggested an extremely optimistic outlook of the online advertising market. GSIC’s valuation suggested that the company was a healthy investment proposition for the long-run and the company’s near term intentions of raising INR 4.5 billion through GDRs was justifiable taking into consideration the market where the company was planning to expand.
- POST-MORTEM REVIEW:
The client was able to successfully gauge the investment proposal from the business model and valuations point of view but the final decision regarding the investment stake is still in the offing.
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