Valuations - it is the keyword.
Say for eg a company comes into being, and they have book of order of 5 crores.
Their employee cost is 40 to 50 lakhs, for the first year.
They go to market.
How do they price it? (think 2001 days)
Profit is heavy. No one bothers to check the books, other than the promoter.
35 times multiple. So based on the capital employed stock price is done with Book Building at Rs 590 per share of Rs 2. (go figure it out yourself, with 6% being the book building bank co's fees). I have not mentioned the capital employed purposely, being an amount just sits in the bank as reserves, and seeing that these banks give loans for other biz, current account OD etc.
I want a bank with such credentials to help me out with 21 crore rs USD 5 mil (plan is ready).
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