PRICING AS PER

CONTROLLER OF CAPITAL
ISSUES( CCI )
GUIDELINES

Presented By:
Megha Goyle
Why Do we need CCI guidelines?
 To fix the price when companies go for further
issues either on a rights basis or to the public

 Where existing unlisted(closely held) companies

propose public issues, the present valuation
guidelines will not be enforced, and the issue price
will be determined by CCI largely in consultation
with the company, taking the projected earnings
into considerations.Book1.xlsx
Adjustment to fair value
If the Fair value worked on basis of 15%
capitalization rate is less than the average market
price by 20% then it will remain the same, else,

AVERAGE MARKET CAPITALIZATION RATE

PRICE
> 20%< 50% OF FV 12%

> 50%<75% OF FV 10%

>75% OF FV 8%

In this case HUL falls in the second category, HDFC Bank,

ONGC,SBI,Tata Motors falls in the third category.
Adjusted Fair value( CCI pricing)
Name Fair Value Avg. Market price Over/under priced

Over priced
MTNL 75.63 81.65
Over priced
HUL 196.6 262.4
Over priced
HDFC BANK 133.9 1671.45
Over priced
ONGC 185.12 1119.35
Under priced
ASHOK LEYLAND 117.36 49.22
Over priced
ITC LIMITED 140.68 239.82
Over priced
SBI 286.2 2006
Over priced
ULTRATECH 142.97 903.6
Over priced
BHARTI AIRTEL 319.49 348.25
Over priced
TATA MOTORS 102 568.25
Price Earning Ratio
P/E Ratio Characteristics Companies

Above 20 times High Growth, excellent MTNL,HDFC

management, liberal Bank,ONGC, SBI,
distribution policy Tata Motors
10-12 times Moderate Growth,
average management,
stringent distribution
policy
15 times Ideal for pricing Issue Ultratech