ASHISH KOPPA

REGISTERED VALUER FOR SECURITIES

AND FINANCIAL ASSETS
IBBI/RV/04/2019/11841

Report Number: 036/2021

July 23, 2021
The Board of Directors,
M/s. Curefoods India Private Limited,
No. 72/4, Roopena Agrahara,
Hosur Road, Madiwala Post,
Bangalore 560 068

Valuation Report
1. BACKGROUND

1.1 M/s. Curefoods India Private Limited (hereinafter referred to as "Curefoods India" or
''the Company'') is a private limited company incorporated on October 10, 2020
under the Companies Act, 2013. Curefoods India is in the business of establishing a
food-based solution (including by way of kitchens and restaurants) for ordering and
delivering of healthy food and drinks and creation of a just in time food supply
chain.

1.2 Curefoods India has engaged Mr. Ashish Koppa, Registered Valuer for securities and
financial assets (hereinafter referred to in the first person) to carry out valuation of
Compulsorily Convertible Preference shares (‘CCPS’) of the Company as per
applicable valuation standards. This valuation is conducted for the purpose of the
proposed allotment of CCPS of the Company. The valuation is carried out in
accordance with Section 42 and Section 62(1)(C) of the Companies Act, read with
Companies (Prospectus and Allotment of Securities) Rules, 2014 and Companies
(Share Capital and Debentures) Rules, 2014.

1.3 I have carried out the valuation of shares of Curefoods India as on May 31, 2021
(herein after referred to as the ‘Valuation Date’) for the limited purpose of
determining the fair value of CCPS of Curefoods India based on information,
explanations and representations provided by the management of Curefoods India.
 ASHISH KOPPA
REGISTERED VALUER FOR SECURITIES
AND FINANCIAL ASSETS
IBBI/RV/04/2019/11841

1.4 Neither I nor my employees have any financial interest or conflict of any kind in the
entity being appraised and the fee for the preparation of this report is not contingent
upon results reported.

1.5 The ensuing paragraphs dwell in detail on the scope of work carried out, limitations
and salient observations made during the course of valuation.

2. SHARE CAPITAL & SHARE HOLDING PATTERN

2.1 The dilutive paid-up equity shares of Curefoods India as on the Valuation Date is
1,25,0031 equity shares of Rs. 10/- each.

2.2 The CCPS of Curefoods India carry a par value of Rs. 10/- each and each CCPS is
convertible into one equity share of the Company.

3. LIMITATIONS
3.1 I have relied on the financial data and the representations provided by the
Company’s management.

3.2 I have not performed an audit of the financial statements or information or

documentation made available in the course of the valuation and therefore do not
accept any liability for the same.

3.3 As this report has been compiled in good faith based on the documents and records
made available for verification and information and explanations offered, should any
of my observations be different from what the management perceives, it is
imperative that I be informed immediately.

1
This includes the 25,003 CCPS of Rs. 1 each which will be issued by the Company pursuant to the approval of the
scheme of arrangement by NCLT.
 ASHISH KOPPA
REGISTERED VALUER FOR SECURITIES
AND FINANCIAL ASSETS
IBBI/RV/04/2019/11841

4. METHODOLOGY
4.1 The methodology followed for valuation of the Company is as per the valuation
standard applicable to Registered Valuers. I have examined the suitability of all three
approaches to equity valuation, viz., i) Asset Approach, ii) Income Approach and iii)
Market Approach to arrive at the equity valuation:
• Net Asset Value (NAV) Method Valuation of shares under asset approach
attempts to measure the value of net assets of a company against each share. The
general principle behind asset-based valuation methods is that the value of an
enterprise is equal to the fair market value of its assets less the fair market value
of its liabilities.

Fair value of assets, for this purpose can be book value, net replacement value,
net realisable value or value estimated using market-based or income-based
approaches.

The asset approach may be most appropriate for valuation of company under
following specific circumstances:
ü Where there is paucity of information about future profitability or uncertainty
about future cash flows;
ü Where the Company being valued is in stage of liquidation;
ü Where there are violent fluctuations or disruptions in business;
ü Where it is required by specific provisions of any tax or other statutes;

• The Income Approach indicates the value of a business based on the value of the
cash flows that a business is expected to generate in future. This approach is
appropriate in most going concern entities as the worth of a business is generally a
function of its ability to earn income/cash flow and to provide an appropriate return
on investment.

Income approach includes different models of valuation such as Discounted Cash

Flow model (“DCF”), Maintainable Profits basis, Dividend Discount model and
others, of which DCF is the most commonly used methodology and is widely
accepted by valuers.
 ASHISH KOPPA
REGISTERED VALUER FOR SECURITIES
AND FINANCIAL ASSETS
IBBI/RV/04/2019/11841

DCF is based upon expected future cashflows of the Company that will determine
investor’s actual return and is not influenced by short-term market conditions or
non-economic indicators. DCF methodology is not vulnerable to accounting
conventions since it is based on cashflows rather than accounting profits.

DCF method of valuation is based on three key factors: Cash flow projections,
Discount Rate and Terminal Value.

Cash flow projections used for DCF shall reasonably capture the growth prospects
and earnings capability of the Company, and shall be determined based on its past
performance and factors such as the Company’s vulnerability to advancement in
technology, actions by competitors, changes in end-user requirements, expansion
plans, cyclical fluctuations, effects of change in government policies, availability of
financing etc.

Discount rate (“Cost of Capital”) used to discount the future cash flows, is the
aggregate of risk-free rate and risk premium, included to account for sensitivity to
market returns, uncertainties and risks associated with the business.

Risk premium can be determined by using various models of which Capital Asset
Pricing Model (“CAPM”) is most prominent. Discount rate arrived at through this
signifies cost of equity.

For a leveraged company, discount rate should be adjusted for leveraging, by

arriving at Weighted Average Cost of Capital (“WACC”) with appropriate weights
allocated to cost of equity and post-tax cost of debt, considering targeted or industry
standard debt-equity ratio and other parameters.

Additional risk premium can be added to the Discount rate to incorporate risks
associated with stage and size of business control factors, marketability of the
securities of the Company, etc.
 ASHISH KOPPA
REGISTERED VALUER FOR SECURITIES
AND FINANCIAL ASSETS
IBBI/RV/04/2019/11841

Fair market value should account for cash flows over the entire life of the company
and hence, terminal value is to be estimated to reflect the value of the cashflows
arising after the forecast period. Terminal value can be computed using perpetual
growth model which assumes that business has an infinite life and a stable growth
rate of cashflows. Growth rate is estimated by considering various factors like size of
a company, existing growth rate, competitive landscape, profit reinvestment ratio
etc.

• Market Value Approach aims to determine the value of an asset, based upon how
similar assets are priced in the market by analysing recent transaction or sales of
assets comparable to the assets being valued.

Value under Market Approach can be determined through different methodologies

namely Market Comparable Method, Market Transaction Method and Prior Sale of
Business Method.

Market Comparable Method involves identification of comparable companies and

derivation and application of multiples, which are a ratio of the enterprise value
over different financial parameters such as revenue, profits, earnings per share, book
value etc., after adjustment for differences in fundamentals such as risk profile,
growth rate etc. Comparable companies with economic, political, competitive, and
technological factors similar to those of the Company being valued are selected.

Market Transaction Method uses transaction multiples, implied in the recent

acquisition / disposal of comparable asset, in place of trading multiples for
determination of value. This method is specifically useful in case of existence of
listed comparable companies.

Prior sale of business method also uses transaction multiples; however, this multiple
is implied in the prior transactions involving the company whose shares are valued.
 ASHISH KOPPA
REGISTERED VALUER FOR SECURITIES
AND FINANCIAL ASSETS
IBBI/RV/04/2019/11841

The Market Approach is conceptually preferable to the other approaches both

because it uses direct comparisons to similar enterprises and the analysis is based
upon actual market transactions. However, it is difficult to identify a perfectly fitting
comparable, with similar growth rates, business composition, stage and risks of the
business. Further, listed companies used for comparison have superior access to
capital and possess high marketability, which results in significant difference in
value. This approach is used in case of availability of recent and relevant market
data and reflects the current market perceived value of company’s business.

4.2 I have applied the Discounted Cash Flow (‘DCF’) method in the subject valuation as
it is the best indicator of the intrinsic value of the business.

5. ASSUMPTIONS

5.1 For the purpose of determining the fair value, I have relied on the projections,
provisional financial statements, information and explanation provided vide their
letter dated and discussions held with the management of the Company.

5.2 While computing the DCF value, I have used discount rates being the average cost of
capital, arrived by using the Capital Asset Pricing Model, cost of debt and inputs
provided by the management. In computing Beta, I have analysed comparable listed
companies (Refer to Annexure I).

6. VALUATION RESULTS
6.1 Discounted Cash Flow (DCF):

6.1.1. Based on the above inputs, the DCF value of shares of Curefoods India is INR 310.53
Crores. (Refer to Annexure II).

6.1.2. The dilutive paid-up equity shares of Curefoods India as on the Valuation Date is
1,25,003 equity shares of Rs. 10/- each.
 ASHISH KOPPA
REGISTERED VALUER FOR SECURITIES
AND FINANCIAL ASSETS
IBBI/RV/04/2019/11841

6.1.3. Therefore, the Fair Value per CCPS of Curefoods India as on the Valuation Date is
arrived at Rs. 24,842.12/- per share.

ASHISH KOPPA
Registered Valuer for Securities and
Financial Assets
UDIN: 21229857AAAAKZ5746

Place: Bengaluru
Including Annexure I and II
 ASHISH KOPPA
REGISTERED VALUER FOR SECURITIES
AND FINANCIAL ASSETS
IBBI/RV/04/2019/11841

Annexure - I

Computation of Cost of Equity % Remarks

Risk Free Rate 6.17% Indian Government Treasury Bond rate

Market Return 14.61% www.bseindia.com

Market Premium 8.44%

Beta (No.) 1.16 http://pages.stern.nyu.edu/

Cost of Equity 15.96%

 ASHISH KOPPA
REGISTERED VALUER FOR SECURITIES
AND FINANCIAL ASSETS
IBBI/RV/04/2019/11841

Annexure - II

Curefoods India Private Limited

Valuationas
Valuation - Discounted Cash Flow Method - FCFE (Free Cash Flow to Equity)
at 30 June 2019 z In Crores
Particulars / Years Year 1 Year 2 Year 3 Year 4 Year 5 Terminal Yr.
No. of Months 7 19 31 43 55 55
Profit after tax (12) (15) (6) 34 106
Depreciation 2 4 5 7 8
Capital expenditure (6) (8) (10) (10) (10)
Changes in working capital 1 (6) (7) (9) (13)
Free Cash Flow to Equity (15) (25) (18) 22 92 92
Discount Factor (No.) 0.87 0.71 0.59 0.52 0.43 0.47
Terminal Growth Rate (%) 3.0%
Present Value (13) (18) (11) 11 39 43
NPV of explicit period 8
Present Value of perpetuity 302
Cash balance as on the valuation date 0
Value of Equity (Rs. In Crores) 310.53
No. of existing Shares 1,25,003
Value per Share (Rs.) (Rounded off) 24,842.12

Cost of Equity 16%

Illiquidity discount 2%
Discounting Rate 18%