Sum of Parts Valuation (SOTP)
Mr. Chander Sawhney Vice President +9810557353 chander@indiacp.com C ompany A is doing Sugar Business with Value of Say Rs 100 and company B is doing Cement Business with Value of say again Rs. 100 then what should be the value of company C doing both the above business by itself, On unitary basis it should be Rs 200 i.e. Value of C company = Value of A company + Value of B company. It seems so simple; however it is not the way how valuation actually happens in the real life scenarios. That’s where the role of a valuer becomes significantly important. A corporate valuer always focus on the risk involved while undertaking any SOTP valuation and gives appropriate discounts accordingly. In the