Course Outline

Programme PGDM(FM) Batch-06

Batch 2022-24
Core/ Elective Elective
Course Code E317
Course Title Business Valuations
Course Credits 1.5
Term 3 (Post mid-term)
Academic Year 2023-24
Course Pre-requisite(s) Financial Accounting, Corporate Finance
Course Instructor Prof Vandana Gupta
Course Instructor Email Vandana.gupta@fsm.ac.in
Course Instructor Phone (Office) +911146485581
Student Consultation Hours Weekdays 9-11 am (if no class) else 2pm-4 pm
Office location Room No B-202, FSM, B-18 Qutub
Institutional Area

1. Course Overview
A study on business valuations is a crucial input for all elective courses in finance. This
course will provide insights about the role valuations play in decision making for finance in
acquisition analysis, corporate finance and other aspects. The course attempts to link
theoretical background study with practical issues of companies and develop the decision-
making attribute among students by exposure to practical applications of several valuation
tools used in the process of organic and inorganic growth, diversification and divestment by
companies. Practical examples and cases are discussed in the course to help students
understand core principles in the context of realistic situations. Students learn to build a basic
financial model and value any company whether publicly listed or private, by taking
information from companies’ annual reports and other sources using absolute or relative
valuation and summarize their analysis in a meaningful way. The course is a basic
foundation for career prospects for students in investment banking, consulting, equity
research, private equity, portfolio management and hedge funds.

2. Course Learning Outcomes (CLOs)

By the end of this course, students will be able to:

CLO1: Explain the various valuation tools and the strengths and weaknesses of different
methods.

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CLO2: Demonstrate the ability to work in teams in valuing firms from across sectors

CLO3: To interpret the valuations in decision making

3. Mapping of Course Learning Outcomes (CLOs) with Programme Objectives (POs)

PO PO PO PO PO PO PO PO PO PO PO PO
1 2 3 4 5 6 7 8 9 10 11 12

CLO1 I
CLO2 E
CLO3 E
{I – Introduce (Level-1), R – Reinforce (Level-2), E – Emphasis (Level-3)}

4. Pedagogy
Pedagogy revolves less about theory and more about industry practices in valuation. An
array of pedagogical methods is utilized, including case studies, in-class presentations
and excel-based modeling. Suitable sessions from industry focusing on valuations in start
-ups, brand valuation will be done. We will draw on related academic research and
articles by successful practitioners to illustrate some of the concepts being discussed.
Prior to each class, students are expected to read the relevant textbook chapter and any
additional assigned readings. Students will also have hands-on session on developing an
excel-based model for valuing a listed firm. Discussions will entail the impact of the
value so determined by the model on different stakeholders. Total 10 sessions of 90
minutes each would be conducted.

5. Evaluation Components

Component Description Weight CLO

Case Analysis Student’s regularity in class, level of 0.10 CLO2

preparedness for each class and his/her
participation in the class discussions in case
analysis will form the basis of evaluation for this
component.
Quiz There will be one quiz at the end of five 0.20 -
sessions
End-term The end-term question paper would consist of 0.50 CLO1,
Examination application based questions and a case let to CLO3
assess the application and analytical ability of
the students.
Group Project & Group project will involve developing a 0.20 CLO2,
Presentation valuation model and its implication for the

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 company. This will develop the analytical and
decision making skills of students.

6. Text Book / Reference Book(s)/ Resources

Text Book:
Text Book: Valuation, The Art and Science of Corporate Investment Decisions by Sheridan
Titman and John Martin 3rd Edition, Pearson
Reference Book(s):
Damodaran, A.(AD), Damodaran on Valuation, “Security Analysis for Investment and
Corporate Finance” John Wiley & Sons, New Delhi, 2nd edition, 2011

Web Resources
1. www.bseindia.com and www.nseindia.com
These websites have details about all listed companies in India. There are details of new
listings, current and historical share price data, live charts, derivative information and
latest corporate announcements

2. Refinitiv Eikon
The students will learn to use the database for valuation purposes, to extract information on
companies, industries and ratios
3. CMIE Prowess
The students will learn to extract information on the financials of firms for further analysis.

7. Session Plan
Session Topic Requirements: Learning Outcomes
No. Readings/ Cases
1 Introduction to business Chapter 1 Pp1-17 Knowledge of the
valuations: concept, Role of significance of valuations,
valuations in different areas of Chapter 1 of the different purposes of
finance, features of the Damodaran doing valuations [CLO1]
valuation process, corporate
valuation in practice.
2 Methods on valuations: Chapter 2 pp18- Understand the different
Income Approach, Market 53 tools of valuations.
Approach, and Asset Get a basic understanding
Approach; Absolute, Relative of DCF technique
and Residual. [CLO1]
Introduction to discounted
cash flow technique

3-4 DCF technique for valuation- Chapter,2,4,6 – To understand the

Definition and Measurement Titman pp 18-53; measurement of expected
of Cash Flows, Forecasting 100-152, 188-223 cash flows, their
and valuation of free cash Chapter3-5 forecasting under different
flows, FCFF and FCFE Damodaran assumptions, with concepts
The No-Growth Case - on discount rate, growth
Constant Growth - rate
Supernormal Growth followed [CLO1]

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 by No Growth - Supernormal
Growth followed by Constant
Growth
4 Dividend Discount models:
application and issues
5 Relative valuation:
architecture and basis, types
of relative valuations tools,
merits and demerits, P/E,
P/Sales, EV/EBIDTA,P/BV
6 Private company valuation,
SOTP valuation,
7 Introduction to Residual
Income method
8-9 How to make financial
projections create a fully
linked financial model with
football field valuation
10 Project Presentations
Case on Federal Determine the value of the
Bank bank with dividend model
and its assumptions and
forecasting [CLO2,
CLO3]
Chapter8,9 Understand the concept of
pp 260-400 the relative valuation too,
comparable companies
and types of RV tools
[CLO1]
Chapter 10, pp Gain an understanding of
359-403 how the private companies
valuation differs from
public companies,
understand sum of parts
valuation [CLO1 and
CLO2]
Case on Indus Ind Residual Income models
Bank and applications:
Valuation of banks/FIs
using residual income
model
Understand the method of
valuing a bank, its
assumptions and
forecasting
[ CLO2, CLO3]
Excel-based Excel based spreadsheet
modeling modeling for business
valuations
[CLO1, CLO2 and CLO3]
[CLO2]

Plagiarism:

Plagiarism is looked at as the presentation of the expressed thought or work of another person
as though it is one's own without properly acknowledging that person.

Cases of plagiarism will be dealt with according to the Plagiarism Policy of the institute. It is
advisable that students should read the Plagiarism clause mentioned in the Student
Handbook for detailed guidelines. It is also advisable that students must not allow other
students to copy their work and must take care to safeguard against this happening. In cases of
copying, normally all students involved will be penalized equally; an exception may be, if the
students can establish the work is of their own and they have taken reasonable care to safeguard
their work against copying.

For official use:

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As Benchmarked with course content in previous year, the contents of this course: (Please
mark the right option below)
(a) Is totally new
(b) Has not changed at all
(c) Has undergone less than/equal to 20% change ✔
(d) Has undergone more than 20% change

Case Requisition Format

Programme: PGDM Batch-32, PGDM(IB) Batch-17, PGDM(FM) Batch- 06 &

PGDM(BDA) Batch-04

S. No. Title, Author & Product No. No. of Pages Total No. of cases Visiting
Publication details registration required for faculty copy
Students (if required)
1 Federal Bank: Divided 9B17N005 10 240 240 No
Discount Valuation,
Debasish Maitra and Varun
Dawar, Ivey Publishing
2 IndusInd Bank: Residual 9B16N015 7 240 240 No
Income Valuation, Varun
Dawar, Rakesh Arrawatia,
Saumya Ranjan Das and
Arit Chaudhury, Ivey
Publishing
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Note: Maximum of 04 cases in full credit course & 02 cases in a half credit course.

Approvals:

Course Faculty Area Chair

AACSB Accreditation Committee:

Sr. Manager (Academics-I) Dean (Academics)