Ramkumar’s Posts
Does Big Market Delusion Work?
Does Big Market Delusion Work? One of the difficulties we face when valuing young companies or companies with new #businessmodels is our delusion of the big markets that these firms claim to serve when they arrive at their #TAM (Total Addressable Market). As a result, investors/VCs justify high pricing for these companies by pointing to their TAM. We
Challenges in Valuing Businesses in Transition – Case of Volkswagen
Challenges in Valuing Businesses in Transition – Case of Volkswagen
Organic vs Inorganic Growth Strategy? Which one to choose and When?
Organic vs Inorganic Growth Strategy? Which one to choose and When?
Risk Capital During High Inflationary Periods
Risk Capital During High Inflationary Periods
Inflation, Interest Rates and Risk Premiums in Valuations
Inflation, Interest Rates and Risk Premiums in Valuations
Implied Equity Risk Premium Calculation in May 2022
Implied Equity Risk Premium Calculation in May 2022
LTI – Mindtree Merger
LTI – Mindtree Merger Another consolidation is happening in the Indian IT services sector with the merger of LTI – Larsen & Toubro Infotech and Mindtree. My initial insight from the announcement is that 𝐋𝐓𝐈 𝐰𝐢𝐥𝐥 𝐩𝐚𝐲 𝐌𝐢𝐧𝐝𝐭𝐫𝐞𝐞 𝐬𝐡𝐚𝐫𝐞𝐡𝐨𝐥𝐝𝐞𝐫𝐬 𝟎.𝟕𝟑 𝐋𝐓𝐈 𝐬𝐡𝐚𝐫𝐞𝐬 𝐟𝐨𝐫 𝐞𝐯𝐞𝐫𝐲 𝐬𝐡𝐚𝐫𝐞 𝐨𝐟 𝐌𝐢𝐧𝐝𝐭𝐫𝐞𝐞, effectively paying a 𝟓.𝟕𝟏% 𝐩𝐫𝐞𝐦𝐢𝐮𝐦 𝐨𝐫 𝐑𝐬.𝟑𝟏.𝟕𝟔 𝐛𝐢𝐥𝐥𝐢𝐨𝐧 more than Mindtree’s market
Right Investment Strategy Post Russia Ukraine War
Right Investment Strategy Post Russia Ukraine War
How DCF Valuation Incorporates Economic Principles
How DCF Valuation Incorporates Economic Principles
Irrational Exuberance And Behavioural Finance
Irrational Exuberance And Behavioural Finance
How to command superior valuations for your company?
How to command superior valuations for your company?
Incorporating Share Dilutions In Valuations
Incorporating Share Dilutions In Valuations One challenge investors often confront when valuing young promising startups is capturing the effect of share dilution. For instance, for startups to scale, they need to reinvest. Thus, these startups have negative cash flows during the initial years. If the startup needs to sustain itself, it needs capital, and investors
Five Biggest Mistakes By Buyers In M&A
Five Biggest Mistakes By Buyers In M&A Five biggest mistakes acquirers make in merger and acquisitions transactions: 1)Instead of arriving at the cost of capital for the target company, they use the acquirer’s cost of capital (#WACC). 2)The acquirers pay a fixed 20% control premium over the target’s intrinsic value without analysing whether the premium adds
Choosing The Right Integration Strategy In M&A
Choosing The Right Integration Strategy In M&A
Revisiting Meta Platforms Valuation
Revisiting Meta Platforms Valuation I value social media companies regularly to see if the network effects that we thought would work for these firms continue to operate. Meta and Google are the two leaders in social media networks that have disrupted the traditional advertising model. They were instrumental in firms reallocating their advertising spending from
Identifying The Right Capital Structure For An Investment
Identifying The Right Capital Structure For An Investment