IB Tools

Sum-of-the-Parts (SOTP) Valuation

Value each business segment on its own multiple, add them up, apply any holding-company discount, then bridge to equity per share.

Equity value per share

₹133.8

Sum of segment values

₹9,100 Cr

EV after discount

₹8,190 Cr

Equity value

₹6,690 Cr

Segment 1
3,200
Segment 2
3,500
Segment 3
2,400

Formula

  • Segment EV = Segment EBITDA × segment multiple
  • Group EV = Σ segment EV × (1 − holdco discount)
  • Equity = Group EV − net debt; per share = Equity ÷ shares

How it works

  1. Pick a multiple for each segment from its own listed peers.
  2. Add the segment values; conglomerates often trade at a discount to this sum.
  3. Subtract net debt and divide by shares.

Where it's used: Valuing diversified groups, spin-off and demerger analysis.

Educational tool only. Not investment advice, not a recommendation, and not a substitute for professional valuation work.