Valuation for Strategic Energy Asset Integration under Scheme of Arrangement

NCLT | Share Exchange Ratio | Power Sector Valuation

Enabled seamless regulatory approval for a complex intra-group merger involving captive energy assets.

Situation

A large, globally integrated industrial group initiated a restructuring to consolidate its captive power generation business into the parent entity. The objective was to optimize capital allocation, enhance operational synergies, and simplify the group structure.

The transaction required an independent valuation to determine a fair share exchange ratio under a court-approved scheme of arrangement.

Challenges included:

• Valuation of capital-intensive regulated power assets
• Complex inter-company consumption linkages
• Multi-layered regulatory scrutiny (NCLT, SEBI, Companies Act)

Need for audit-defensible outputs within tight timelines

Approach

• Built integrated DCF models reflecting operational interdependencies
• Applied triangulated valuation approach (DCF, Trading Multiples, Transaction Benchmarks)
• Conducted scenario and sensitivity analysis on tariffs, fuel costs, and utilization
• Ensured alignment with valuation standards and regulatory expectations
• Delivered fully documented, litigation-ready valuation reports

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Outcome

• Supported a fair and defensible share exchange ratio
• Enabled smooth progression through regulatory and shareholder approvals
• Strengthened stakeholder confidence through transparent valuation methodology
• Facilitated strategic consolidation of energy operations

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Key Highlights

• Scheme of Arrangement (NCLT-driven)
• Power & Infrastructure Valuation
• Multi-method approach
• High regulatory scrutiny