Merger Assumptions for Finolex Cables & Crompton Greaves

Assumptions

Transaction Inputs Scenarios

Acquirer Name Finolex Cables Scenario #
Target Name Crompton Greaves
Acquirer Share Price 961.00 Synergies
Target Share Price 282 Revenue enhancement
Transaction Close Date 9/30/2023 COGS savings
Financial Reporting Units Rs. 000s Marketing savings
Currency Indian Rupees General & Admin savings

Restructuring Charges 10,000 Synergies in Year 1 (full yr.)

Equity Issuance Fees 0.03 Synergies in Year 2
Debt Issuance Fees 0.03 Synergies in Years 3+
Other Closing Costs 4000
Financing
Replace Target Debt Yes Debt Tranche
Replace Acquirer Debt No Senior Debt A
Senior Debt B
Acquirer FD Shares Outstanding 5,000 Subordinated Debt
Target FD Share Outstanding 1000 Interest Rate
Shares Issued 100 Senior Debt A
Pro Forma Shares Outstanding 5,100 Senior Debt B
Subordinated Debt
Share Issuance Discount 0.01
Share Issuance Price ₹ 951.39
Transaction
Takeover Premium
Purchase Price Cash Consideration
Target Share Price ₹ 282.00
Takeover Premium 25.0%
Offer Price ₹ 352.50
Sources & Uses of Cash
Acquirer Share Price ₹ 961.00 Sources of Cash
Share Exchange Ratio 0.37 Cash
Stock Issued
Target Shares Outstanding 1,000 Debt Issued
Offer Price ₹ 352.50
Purchase Price 352,500
Target Debt 82,914
Target Cash 53,193
Enterprise Value 382,221 Total Sources

Goodwill and Purchase Price Allocation

Fair Market Value Book Value Fair Value Adjustment
Inventory & Other Current Assets 779 900 121
Target PP&E 22,000 40,000 18,000
Identifiable Intangibles
Net Identifiable Assets 22,779 40,900 18,121

Closing Balance Sheet

Pro Forma Consolidated Balance Sheet

Step # 1 2 3
Acquirer Target Fair Value
9/30/2023 9/30/2023
Assets
Cash 69,201 56,298 14,074
Accounts Receivable 3,647 419 105
Inventory 5,415 622 156
Current Assets 78,263 57,339 14,335
Property & Equipment 113,302 76,661 19,165
Goodwill 2,707 619 155
Total Assets 116,009 134,619 19,320

Liabilities
Short Term Debt 45,157 50,000
Accounts Payable 3,077 118
Current Liabilities 48,234 50,118
Long Term Debt 8,398 82,914
Total Liabilities 56,632 133,032
Shareholder's Equity
Equity Capital 235 127
Retained Earnings 59,142 1,461
Shareholder's Equity 59,377 1,588
Total Liabilities & Shareholder's Equity 116,008 134,620
Check -1 0.156

Accretion/Dilution Analysis

2023
Earnings Per Share
Acquirer Net Earnings
Target Net Earnings
Pro Forma Net Earnings

Acquirer Shares O/S

Target Share O/S
Pro Forma Shares O/S

Acquirer EPS
Target EPS
Pro Forma EPS

Accretion/Dilution
 LIVE --> 4 1 2 3 4

nue enhancement 6,500 5500 6,000 6,000 6,500

875 875 875 875 875
eting savings 1,250 1250 1,250 1,250 1,250
ral & Admin savings 1,000 1000 1,000 1,000 1,000
-
gies in Year 1 (full yr.) 0.30 0.3 0 0 0
gies in Year 2 0.65 0.65 1 1 1
gies in Years 3+ 1.00 1 1 1 1
-
-

100,000 0 100,000 100,000 100,000

50000.00 0 - 50,000 50,000
rdinated Debt 25000.00 0 - - 25,000

0.06 0.055 0 0 0
0.06 0.0575 0 0 0
rdinated Debt 0.08 0.0825 0 0 0

-
-
over Premium 0.25 0.15 0 0 0
Consideration 0.50 0 0 0 1

ces & Uses of Cash

ces of Cash Uses of Cash
98,701 Cash Consideration
176,250 Stock Consideration
175,000 Target Debt - Replace
Acquirer Debt - Replace
Debt Financing Fees
 Equity Financing Fees
Other Closing Costs
449,952 Total Uses

Purchase Price Allocation

Total Purchase Price
Net Book Value of Assets
Excess Purchase Price
Write-off Existing Goodwill
Fair Value Adjustments
Excess Purchase Price After Adjustments
Goodwill

4 5 6 7 8 9
Target PF Purchase Financing Financing Financing Total Adj.
Transactions (Equity+Debt) Fees Re finance

70,372 (176,250) 175,000 (14,538) (82,914) (28,329)

524 - - 524
778 - - 778
71,674 - (27,027)
72,976 - 72,976
325 329,902 330,227
73,301 376,176
-
-
-
118 118
118
82,914 175,000 (82,914) 175,000
175,118
-
127 (127) 176,250 176,250
1,461 (1,461) (14,538) (14,538)
161,712
336,831
 2024 2025 2026 2027 2028

32,900 44,136 58,175 77,542 101,212

(3,370) (2,143) (317) 1,832 4,467
156 16,675 35,174 57,178 81,851

5,000 5,000 5,000 5,000 5,000

1,000 1,000 1,000 1,000 1,000
5,100 5,100 5,100 5,100 5,100

6.58 8.83 11.64 15.51 20.24

-3.37 -2.14 -0.32 1.83 4.47
0.03 3.27 6.90 11.21 16.05

-100% -63% -41% -28% -21%

 5

6,500
875
1,250
1,000

0
1
1

100,000
50,000
25,000

0
0
0

0
1

176,250
176,250
82,914
-
5,250
 5,288
4,000
449,952

352,500
4,477
348,023

18,121
329,902
329,902

10
Consol
9/30/2023
-
40,872
4,171
6,193
51,236
186,278
332,934
570,448

3,195
3,195
183,398
186,593

176,485
44,604
221,089
407,682
 Forecast
Pro Forma Model CLOSE 2023 2024
Balance Sheet Check ok ok ok
End of Period 9/30/2023 12/31/2023 12/31/2024
Days in Period 273 92 365
Fraction of Year 0.750 0.250 1.000

Assumptions

Debt Amortization Schedule Check

Senior Debt A 100% 0% 25% 25%
Senior Debt B 100% 0% 0% 20%
Subordinated Debt 100% 0% 0% 0%

Revenue Growth (% Change)

Cost of Goods Sold (% of Revenue)
Marketing, Advertising & Promotion (% of Revenue)

Depreciation & Amortization (% of PP&E) 20.0% 20.0%

Tax Rate (% of Earnings Before Tax) 30.0% 30.0%
Accounts Receivable (Days) 18 18
Inventory (Days) 80 90
Accounts Payable (Days) 37 37

Equity Issued (Repaid) ($000's) - -

Dividends Paid - -

Income Statement

Revenue 18,550 98,410

Cost of Goods Sold (COGS) 8,347 43,669
Gross Profit 10,202 54,740
Expenses
Marketing, Advertising & Promotion 927 4,448
General & Administrative 189 534
Depreciation & Amortization 9,314 36,430
Interest 3,620 13,106
Total Expenses 14,051 54,518
Earnings Before Tax (3,849) 222

Taxes (1,155) 67
Net Earnings (2,694) 156

Balance Sheet

Assets
Cash 159,626 160,696 172,869
Accounts Receivable 4,171 3,629 4,853
Inventory 6,193 7,259 10,768
Current Assets 51,236 171,584 188,490
Property & Equipment 186,278 182,152 166,471
Goodwill 332,934 332,934 332,934
Total Assets 570,448 686,670 687,896
-
Liabilities -
Short Term Debt - - -
Accounts Payable 3,195 3,357 4,427
Current Liabilities 3,195 3,357 4,427
Long Term Debt 183,398 105,190 77,190
Total Liabilities 186,593 357,132 358,201
Shareholder's Equity -
Equity Capital 176,485 176,485 176,485
Retained Earnings 44,604 41,910 42,066
Shareholder's Equity 221,089 218,395 218,551
Total Liabilities & Shareholder's Equity 407,682 658,471 659,591

Cash Flow Statement

Operating Cash Flow

Net Earnings (2,694) 156
Plus: Depreciation & Amortization 9,314 36,430
Less: Changes in Working Capital (362) (3,663)
Cash from Operations 6,258 32,923

Investing Cash Flow

Investments in Property & Equipment (5,188) (20,750)
Investments in Businesses
Cash from Investing (5,188) (20,750)

Financing Cash Flow

Issuance (repayment) of debt - -
Issuance (repayment) of equity
Payment of Dividends - -
Cash from Financing - -

Net Increase (decrease) in Cash 1,070 12,173

Opening Cash Balance 159,626 160,696
Closing Cash Balance 159,626 160,696 172,869

Supporting Schedules

Working Capital Schedule

Accounts Receivable 4,171 3,629 4,853
Inventory 6,193 7,259 10,768
Accounts Payable 3,195 3,357 4,427
Net Working Capital (NWC) 7,169 7,531 11,194
Change in NWC 362 3,663

Depreciation Schedule
PPE Opening 186,278 182,152
Plus Capex 5,188 20,750
Less Depreciation 9,314 36,430
PPE Closing 186,278 182,152 166,471

Debt Schedule
Senior Debt A
Opening Balance 100,000 75,000
Addition (Repayment) (25,000) (25,000)
Closing Balance 100,000 75,000 50,000

Senior Debt B
Opening Balance 60,209 60,209
Addition (Repayment) - (12,042)
Closing Balance 50,000 60,209 48,167

Target Debt
Opening Balance 50,000 22,000

Closing Balance 50,000 50,000 22,000

Acquirer Debt
Opening Balance 55,190 55,190
Addition (Repayment) - -
Closing Balance 55,190 55,190 55,190

Total Debt
Opening Balance 105,190 77,190
Addition (Repayment)
Closing Balance 255,190 105,190 77,190

Interest Schedule
Interest Rates
Senior Debt A 5.5% 5.5%
Senior Debt B 5.8% 5.8%
Subordinated Debt 8.3% 8.3%
Target Debt 50000 22000
Acquirer Debt 10.0% 10.0%

Interest Expense (opening balance)

Senior Debt A 1,375 4,125
Senior Debt B 866 3,462
Acquirer Debt 1,380 5,519
Total 3,620 13,106

DCF Model
Assumptions
Tax Rate 25%
Discount Rate 12%
Perpetual Growth Rate 4%
EV/EBITDA Multiple 8.0x
Current Price $961.00
Shares Outstanding 5,100

Discounted Cash Flow Entry 2023 2024 2025 2026 2027 2028 Exit
Date 9/30/2023 12/31/2023 12/31/2024 12/31/2025 12/31/2026 12/31/2027 12/31/2028 12/31/2028

EBIT (228) 13,328 34,860 59,219 88,186 122,741

Less: Cash Taxes (57) 3,332 8,715 14,805 22,047 30,685
NOPAT (171) 9,996 26,145 44,415 66,140 92,056
Plus: D&A 9,314 36,430 33,294 30,785 28,778 27,173
EBITDA 9,085 49,759 68,154 90,005 116,965 149,914
Less: Capex 5,188 20,750 20,750 20,750 20,750 20,750
Less: Changes in NWC 362 3,663 4,820 4,820 5,817 7,854
Unlevered FCF 3,593 22,013 33,870 49,630 68,351 90,624 935,718

Transaction FCFF - 3,593 22,013 33,870 49,630 68,351 90,624 935,718

IRR FCFF

Intrinsic Value Market Value

Enterprise Value 690,964 Market Cap na
Plus: Cash 40,872 Plus: Debt
Less: Debt 183,398 Less: Cash
Equity Value 548,438 Enterprise Value

Equity Value/Share 107.54 Equity Value/Share

Merger Integration
Revenue
Acquirer - 38,395 16,638 86,516
Target 1,912 9,943
Synergies 1,950
Total 18,550 98,410

Cost of Goods Sold

Acquirer 7,487 38,932
Target 860 4,475
Synergies 263
Total 8,347 43,669

Finance Cost
Acquirer 832 4,326
Target 96 497
Synergies (375)
Total 927 4,448

Other Cost
Acquirer 0 0
Target 189 834
Synergies (300)
Total 189 534
Forecast Period
2025 2026 2027 2028
ok ok ok ok
12/31/2025 12/31/2026 12/31/2027 12/31/2028
365 366 365 365
1.000 1.000 1.000 1.000

25% 25% 0% 0%
20% 20% 20% 20%
0% 0% 0% 100%

20.0% 20.0% 20.0% 20.0%

30.0% 30.0% 30.0% 30.0%
18 18 18 18
100 100 100 100
37 37 37 37

- - - -
- 500 500 500

129,623 169,517 218,422 281,998

55,744 72,602 92,001 119,339
73,879 96,914 126,420 162,659

5,457 6,901 9,346 12,525

267 9 110 221
33,294 30,785 28,778 27,173
 11,039 8,971 6,504 5,811
50,057 46,666 44,738 45,730
23,822 50,248 81,683 116,930

7,146 15,074 24,505 35,079

16,675 35,174 57,178 81,851

197,269 241,158 300,047 379,966

6,392 8,337 10,771 13,907
15,272 19,837 25,206 32,696
218,933 269,331 336,024 426,569
153,927 143,892 135,863 129,441
332,934 332,934 332,934 332,934
705,795 746,157 804,822 888,943

- - - -
5,651 7,340 9,326 12,097
5,651 7,340 9,326 12,097
171,139 122,632 216,914 172,388
359,424 365,114 367,100 369,871

176,485 176,485 176,485 176,485

58,741 93,415 150,092 231,443
235,226 269,900 326,577 407,928
677,262 717,275 775,589 859,361

16,675 35,174 57,178 81,851

33,294 30,785 28,778 27,173
 (4,820) (4,820) (5,817) (7,854)
45,150 61,139 80,139 101,169

(20,750) (20,750) (20,750) (20,750)

(20,750) (20,750) (20,750) (20,750)

- 4,000 - -

- (500) (500) (500)

- 3,500 (500) (500)

24,400 43,889 58,889 79,919

172,869 197,269 241,158 300,047
197,269 241,158 300,047 379,966

6,392 8,337 10,771 13,907

15,272 19,837 25,206 32,696
5,651 7,340 9,326 12,097
16,014 20,834 26,651 34,505
4,820 4,820 5,817 7,854

166,471 153,927 143,892 135,863

20,750 20,750 20,750 20,750
33,294 30,785 28,778 27,173
153,927 143,892 135,863 129,441

50,000 25,000 - -
(25,000) (25,000) - -
25,000 - - -

48,167 36,125 24,084 12,042

(12,042) (12,042) (12,042) (12,042)
36,125 24,084 12,042 -

115,949 63,442 165,724 121,198

115,949 63,442 165,724 121,198

55,190 55,190 51,190 51,190

- (4,000) - -
55,190 51,190 51,190 51,190

171,139 118,632 216,914 172,388

4,000
171,139 122,632 216,914 172,388

5.5% 5.5% 5.5% 5.5%

5.8% 5.8% 5.8% 5.8%
8.3% 8.3% 8.3% 8.3%
115949 63442 165724 121,198
10.0% 10.0% 10.0% 10.0%

2,750 1,375 - -
2,770 2,077 1,385 692
5,519 5,519 5,119 5,119
11,039 8,971 6,504 5,811
Terminal Value
EV/EBITDA 935,718
112,471 146,212 190,076 247,099
12,927 16,804 21,846 28,400
4,225 6,500 6,500 6,500
129,623 169,517 218,422 281,998

49,487 64,333 81,733 106,252

5,688 7,394 9,394 12,212
569 875 875 875
55,744 72,602 92,001 119,339

5,624 7,311 9,504 12,355

646 840 1,092 1,420
(813) (1,250) (1,250) (1,250)
5,457 6,901 9,346 12,525

0 0 0 0
917 1,009 1,110 1,221
(650) (1,000) (1,000) (1,000)
267 9 110 221
 Historical Results Forecast Period
Finolex Cables Model 2020 2021 2022 2023 2024 2025
Balance Sheet Check ok ok ok ok ok ok
End of Period 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025
Days in Period 366 365 365 365 366 365
Fraction of Year - - - - -

Assumptions

LIVE SCENARIO 1

SCENARIO 1
Revenue Growth (% Change) 30.0% 30.0% 30.0%
Cost of Goods Sold (% of Revenue) 45.0% 45.0% 44.0%
Depreciation & Amortization (% of PP&E) 5.0% 5.0% 5.0%
Interest Expense (% of Debt) 10.0% 10.0% 10.0%
Tax Rate (% of Earnings Before Tax) 18.0% 18.0% 18.0%
Accounts Receivable (Days) 20 20 20
Inventory (Days) 66 66 66
Accounts Payable (Days) 50 50 50
Debt Issuance (Repayment) ($000's) - - -
Equity Issued (Repaid) ($000's) - - -
Payment of Dividends - - 200

SCENARIO 2
Revenue Growth (% Change) 0.25 0.25 0.25
Cost of Goods Sold (% of Revenue) 0.45 0.45 0.44
Depreciation & Amortization (% of PP&E) 0.06 0.06 0.06
Interest (% of Debt) 0.12 0.12 0.12
Tax Rate (% of Earnings Before Tax) 0.15 0.15 0.15
Accounts Receivable (Days) 20 20 20
Inventory (Days) 66 66 66
Accounts Payable (Days) 50 50 50
Debt Issuance (Repayment) ($000's) 0 0 0
Equity Issued (Repaid) ($000's) 0 0 0
Payment of Dividends 0 0 150

LIVE SCENARIO
Revenue Growth (% Change) 30.0% 30.0% 30.0%
Cost of Goods Sold (% of Revenue) 45.0% 45.0% 44.0%
Finance Cost 5.0% 5.0% 5.0%
Other Cost 10.00% 10.00% 10.00%
Depreciation & Amortization (% of PP&E) 5.0% 5.0% 5.0%
Interest (% of Debt) 10.0% 10.0% 10.0%
Tax Rate (% of Earnings Before Tax) 18.0% 18.0% 18.0%
Accounts Receivable (Days) 20 20 20
Inventory (Days) 66 66 66
Accounts Payable (Days) 50 50 50
Debt Issuance (Repayment) ($000's) - - -
Equity Issued (Repaid) ($000's) - - -
Payment of Dividends - - 200

All figures in Rs. Crores unless stated

Income Statement

Revenue 38,785 45,996 51,193 66,551 86,516 112,471

Cost of Goods Sold (COGS) (17,793) (21,677) (25,124) 29,948 38,932 49,487
Gross Profit 20,992 24,319 26,069 36,603 47,584 62,984
Expenses
Finance Cost 1691 2229 2399 3,328 4,326 5,624
Other Cost 9898 10993 11201 0 0 0
EBITDA 9403 11097 12469 33275 43258 57360

Depreciation & Amortization 938 1012 1025 1,076 1,130 1,187

EBIT 8465 10085 11444 32199 42128 56174

Interest Expense 106 108 98 1,003 1,003 1,003

Earnings Before Tax (EBT) 8,359 9,977 11,346 31,196 41,125 55,170

Current Taxes 1672 1995 2269 6239 8225 11034

Net Earnings 6,687 7,982 9,077 24,957 32,900 44,136

All figures in Rs. Crores unless stated

Balance Sheet

Assets
Cash 41,816 44,530 29,803 69,201 105,085 151,294
Accounts Receivable 1046 1648 1932 3,647 4,728 6,163
Inventory 5,845 7,671 9,050 5,415 7,021 8,948
Current Assets 48,707 53,849 40,785 78,263 116,833 166,405
Property & Equipment 60,000 70,000 85,000 75,000 546 90,279
Goodwill 100 120 144 173 207 249
Total Assets 108,807 123,969 125,929 153,436 117,586 256,933

Liabilities
Short Term Debt 51,406 32,922 53,000 60,209 22,000 115,949
Accounts Payable 7399 8563 8761 4,102 5,319 6,779
Current Liabilities 58,805 41,485 61,761 64,311 27,319 122,728
Long Term Debt 2467 9841 10033 10,033 10,033 10,033
Total Liabilities 61,272 51,326 71,794 74,344 37,352 132,761
Shareholder's Equity
Equity Capital 216 235 235 235 235 235
Retained Earnings 47319 72407 53899 78,856 80,000 123,936
Shareholder's Equity 47,535 72,642 54,134 79,091 80,235 124,171
Total Liabilities & Shareholder's Equity 108,807 123,968 125,928 153,435 117,587 256,932

Check -0 -1 -1 -0 1 -1

Cash Flow Statement

Operating Cash Flow

Net Earnings 6687 7982 9077 24957 32900 44136
Depreciation & Amortization 938 1012 1025 1,076 1,130 1,187
Changes in Working Capital - 1,264 1,465 2,738 1,470 1,902
Cash from Operations 7,625 7,730 8,637 23,294 32,560 43,420

Investing Cash Flow

Investments in Property & Equipment (40,140) (45,193) (53,247) (63,896) (76,676) (92,011)
Sale of Current Assets 80,000 80,000 80,000 80,000 80,000 95,000
Cash from Investing 39,860 34,807 26,753 16,104 3,324 2,989

Financing Cash Flow

Issuance (repayment) of debt 0 7374 192 0 0 0
Payment of Dividends -6244 -8811 -7519 - - (200)
Cash from Financing (6,244) (1,437) (7,327) - - (200)

Net Increase (decrease) in Cash 41,241 41,100 28,063 39,398 35,884 46,209
Opening Cash Balance 575 3430 1740 29,803 69,201 105,085
Closing Cash Balance 41,816 44,530 29,803 69,201 105,085 151,294

Supporting Schedules

Working Capital Schedule

Accounts Receivable 1,046 1,648 1,932 3,647 4,728 6,163
Inventory 5,845 7,671 9,050 5,415 7,021 8,948
Accounts Payable 7,399 8,563 8,761 4,102 5,319 6,779
Net Working Capital (NWC) (508) 756 2,221 4,959 6,430 8,332
Change in NWC 1,264 1,465 2,738 1,470 1,902

Depreciation Schedule
PPE Opening 18,922 23,795 30,728 10,027 75,000 546
Plus Capex 40,140 45,193 53,247 63,896 76,676 92,011
Less Depreciation (938) (1,012) (1,025) (1,076) (1,130) (1,187)
PPE Closing 60,000 70,000 85,000 75,000 546 90,279

Debt & Interest Schedule

Debt Opening 2,467 2,467 9,841 10,033 10,033 10,033
Issuance (repayment) - 7,374 192 - - -
Debt Closing 2,467 9,841 10,033 10,033 10,033 10,033
Interest Expense (106) (108) (98) 1,003 1,003 1,003

DCF Model

Assumptions
Tax Rate 25%
Discount Rate 15.0%
Perpetual Growth Rate 4%
EV/EBITDA Multiple 9.2x
Current Price ₹ 900.00
Shares Outstanding 5,000

Discounted Cash Flow Entry 2023 2024 2025 2026 2027 Exit
Date 9/30/2023 12/31/2023 12/31/2024 12/31/2025 12/31/2026 12/31/2027 12/31/2027
Year Fraction 0.25 1.00 1.00 1.00 1.00 -

EBIT 32,199 42,128 56,174 73,322 97,531

Less: Cash Taxes 6,239 8,225 11,034 14,544 19,386
NOPAT 25,960 33,903 45,140 58,778 78,146
Plus: D&A 1,076 1,130 1,187 1,246 1,308
EBITDA 33,275 43,258 57,360 74,568 98,839
Less: Capex 10,000 12,000 14,500 15,500 16,000
Less: Changes in NWC 2,738 1,470 1,902 2,500 3,166
Unlevered FCF 14,298 21,563 29,924 42,025 60,288 41,400,000

Transaction FCFF - 3,574 21,563 29,924 42,025 60,288 -

IRR FCFF (4,500,000) 3,574 21,563 29,924 42,025 60,288 -

Intrinsic Value Enterprise Value Rate of Return

Enterprise Value 4,455,884 4,500,000 IRR
Plus: Cash 69,201 69,201
Less: Debt 25,085 25,085
Equity Value 4,500,000 4,455,884

Equity Value/Share 900.00 900.00

Forecast Period Stub
2026 2027 2028 Historical Forecast
ok ok ok
12/31/2026 12/31/2027 12/31/2028 9/30/2023 12/31/2022
365 365 366 273 (273)
- - - 0.750 (0.750)

30.0% 30.0% 30.0% 30.0% 30.0%

44.0% 43.0% 43.0% 45.0% 45.0%
5.0% 5.0% 5.0% 5.0% 5.0%
10.0% 10.0% 10.0% 10.0% 10.0%
18.0% 18.0% 18.0% 18.0% 18.0%
20 20 20 20 20
66 66 66 66 66
50 50 50 50 50
(4,000) - - -
- - - - -
- - 200 - -

0.25 0.25 0.25 0.25 0.25

0.44 0.43 0.43 0.45 0.45
0.06 0.06 0.06 0.06 0.06
0.12 0.12 0.12 0.12 0.12
0.15 0.15 0.15 0.15 0.15
20 20 20 20 20
66 66 66 66 66
50 50 50 50 50
-4000 0 0 0
0 0 0 0 0
0 0 150 0 0
 30.0% 30.0% 30.0% 30.0% 30.0%
44.0% 43.0% 43.0% 45.0% 45.0%
5.0% 5.0% 5.0% 5.0% 5.0%
10.00% 10.00% 10.00% 10.00% 10.00%
5.0% 5.0% 5.0% 5.0% 5.0%
10.0% 10.0% 10.0% 10.0% 10.0%
18.0% 18.0% 18.0% 18.0% 18.0%
20 20 20 20 20
66 66 66 66 66
50 50 50 50 50
(4,000) - - - -
- - - - -
- - 200 - -

146,212 190,076 247,099 49,913 (49,913)

64,333 81,733 106,252 22,461 (22,461)
81,879 108,343 140,846 27,452 (27,452)

7,311 9,504 12,355 2,496 (2,496)

0 0 0 0 (0)
74568 98839 128491 24957 -24957

1,246 1,308 1,374 1,442 1,514

73322 97531 127118 23514 -26471

603 603 603 752 (752)

72,719 96,928 126,514 22,762 (25,718)

14544 19386 25303 4552 -5144

58,175 77,542 101,212 18,717 (18,717)
 221,803 304,991 424,232 58,251 69,201
8,012 10,415 13,503 3,657 3,647
11,633 14,779 19,160 5,430 5,415
241,447 330,186 456,895 67,338 78,263
18,888 112,299 45,322 1,158 13,302
299 358 430 516 619
260,634 442,843 502,647 115,077 38,359

63,442 165,724 121,198 45,157 15,052

8,813 11,196 14,515 3,077 1,026
72,255 176,920 135,713 48,234 16,078
6,033 6,033 6,033 10,033 10,033
78,288 182,953 141,746 55,758 18,586

235 235 235 235 235

182,111 259,654 360,665 59,142 19,714
182,346 259,889 360,900 59,318 19,773
260,634 442,842 502,647 115,076 38,359

-0 -1 -1 -0 -0

58175 77542 101212 18717 -18717

1,246 1,308 1,374 1,442 1,514
2,500 3,166 4,150 3,789 2,026
56,921 75,684 98,435 16,371 (19,229)

(110,413) (132,496) (158,995) (47,922) (15,974)

120,000 140,000 180,000 60,000 20,000
9,587 7,504 21,005 12,078 4,026
 4000 0 0 0 0
- - (200) - -
4,000 - (200) - -

70,508 83,189 119,241 28,449 (15,204)

151,294 221,803 304,991 29,803 58,251
221,803 304,991 424,232 58,251 43,048

8,012 10,415 13,503 3,657 3,647

11,633 14,779 19,160 5,430 5,415
8,813 11,196 14,515 3,077 1,026
10,832 13,998 18,148 6,010 8,036
2,500 3,166 4,150 3,789 2,026

90,279 18,888 112,299 45,322 1,158

110,413 132,496 158,995 47,922 15,974
(1,246) (1,308) (1,374) (1,442) (1,514)
18,888 112,299 45,322 1,158 13,302

10,033 6,033 6,033 10,033 10,033

(4,000) - - - -
6,033 6,033 6,033 10,033 10,033
603 603 603 752 (752)
Terminal Value
EV/EBITDA 41,400,000

-61%
 Historical Results Forecast Period
Crompton Greaves Model 2020 2021 2022 2023 2024
Balance Sheet Check ok ok ok ok ok
End of Period 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024
Days in Period 366 365 365 365 366
Fraction of Year - - - -

Assumptions

LIVE SCENARIO 1

SCENARIO 1
Revenue Growth (% Change) 30.0% 30.0%
Cost of Goods Sold (% of Revenue) 45.0% 45.0%
Depreciation & Amortization (% of PP&E) 5.0% 5.0%
Interest Expense (% of Debt) 10.0% 10.0%
Tax Rate (% of Earnings Before Tax) 18.0% 18.0%
Accounts Receivable (Days) 20 20
Inventory (Days) 66 66
Accounts Payable (Days) 50 50
Debt Issuance (Repayment) ($000's) - -
Equity Issued (Repaid) ($000's) - -
Payment of Dividends - -

SCENARIO 2
Revenue Growth (% Change) 0.25 0.25
Cost of Goods Sold (% of Revenue) 0.45 0.45
Depreciation & Amortization (% of PP&E) 0.06 0.06
Interest (% of Debt) 0.12 0.12
Tax Rate (% of Earnings Before Tax) 0.15 0.15
Accounts Receivable (Days) 20 20
Inventory (Days) 66 66
Accounts Payable (Days) 50 50
Debt Issuance (Repayment) ($000's) 0 0
Equity Issued (Repaid) ($000's) 0 0
Payment of Dividends 0 0

LIVE SCENARIO
Revenue Growth (% Change) 30.0% 30.0%
Cost of Goods Sold (% of Revenue) 45.0% 45.0%
Finance Cost 5.0% 5.0%
Other Cost 10.00% 10.00%
Depreciation & Amortization (% of PP&E) 5.0% 5.0%
Interest (% of Debt) 10.0% 10.0%
Tax Rate (% of Earnings Before Tax) 18.0% 18.0%
Accounts Receivable (Days) 20 20
Inventory (Days) 66 66
Accounts Payable (Days) 50 50
Debt Issuance (Repayment) ($000's) - -
Equity Issued (Repaid) ($000's) - -
Payment of Dividends - -

All figures in Rs. Crores unless stated

Income Statement

Revenue 4,825.58 5,453.10 5,883.72 7,649 9,943

Cost of Goods Sold (COGS) 3,306.84 3,611.11 4,237.31 3,442 4,475
Gross Profit 1,519 1,842 1,646 4,207 5,469
Expenses
Finance Cost 42.91 35.31 102.69 382 497
Other Cost 478.24 559.95 688.95 758 834
EBITDA 998 1247 855 3067 4138

Depreciation & Amortization 29.69 42.29 54.23 57 60

EBIT 968 1204 801 3010 4078

Interest Expense 34.15 50.53 70.42 8,291 8,291

Earnings Before Tax (EBT) 934 1,154 730 (5,282) (4,213)

Current Taxes 188.05 156.27 156.54 -1056 -843

Net Earnings 746 998 574 (4,225) (3,370)

All figures in Rs. Crores unless stated

Balance Sheet

Assets
Cash 41,210 48,154 44,933 56,298 56,143
Accounts Receivable 452.36 512.53 529.8 419 543
Inventory 517.77 511.35 618.75 622 807
Current Assets 42,181 49,178 46,081 57,339 57,493
Property & Equipment 60,000 70,000 85,000 75,000 1,616
Goodwill 779.41 779.41 779.41 935 1122
Total Assets 102,960 119,957 131,861 133,275 60,231

Liabilities
Short Term Debt 180 1555.25 325 60,209 22,000
Accounts Payable 791.05 860.35 894.25 472 611
Current Liabilities 971 2,416 1,219 60,681 22,611
Long Term Debt 58,225 67102 82914 66,625 32,000
Total Liabilities 59,196 69,518 84,133 127,306 54,611
Shareholder's Equity
Equity Capital 125.54 126.68 127.22 127 127
Retained Earnings 43638 50313 47600 5,842 5,493
Shareholder's Equity 43,764 50,440 47,727 5,969 5,620
Total Liabilities & Shareholder's Equity 102,960 119,957 131,860 133,275 60,231

Check -0 0 -0 -0 0

Cash Flow Statement

Operating Cash Flow

Net Earnings 746 998 574 -4225 -3370
Depreciation & Amortization 30 42 54 57 60
Changes in Working Capital - - - 570 169
Cash from Operations 775 1,040 628 (4,738) (3,480)

Investing Cash Flow

Investments in Property & Equipment (40,140) (45,193) (53,247) (63,896) (76,676)
Sale of Current Assets 80,000 80,000 80,000 80,000 80,000
Cash from Investing 39,860 34,807 26,753 16,104 3,324

Financing Cash Flow

Issuance (repayment) of debt 0 8877 15812 0 0
Cash from Financing - 8,877 15,812 - -

Net Increase (decrease) in Cash 40,635 44,724 43,193 11,365 (155)

Opening Cash Balance 575 3430 1740 44,933 56,298
Closing Cash Balance 41,210 48,154 44,933 56,298 56,143

Supporting Schedules

Working Capital Schedule

Accounts Receivable 452.36 512.53 530 419 543
Inventory 518 511 619 622 807
Accounts Payable 791 860 894 472 611
Net Working Capital (NWC) 570 739
Change in NWC 570 169

Depreciation Schedule
PPE Opening 19,830 24,765 31,699 11,047 75,000
Plus Capex 40,140 45,193 53,247 63,896 76,676
Less Depreciation (30) (42) (54) (57) (60)
PPE Closing 60,000 70,000 85,000 75,000 1,616

Debt & Interest Schedule

Debt Opening 58,225 58,225 67,102 82,914 82,914
Issuance (repayment) - 8,877 15,812 - -
Debt Closing 58,225 67,102 82,914 82,914 82,914
Interest Expense (34) (51) (70) 8,291 8,291

DCF Model

Assumptions
Tax Rate 25%
Discount Rate 7.6%
Perpetual Growth Rate 4%
EV/EBITDA Multiple 9.2x
Current Price ₹ 282.00
Shares Outstanding 1,000

Discounted Cash Flow Entry 2023 2024 2025 2026 2027 Exit
Date 9/30/2023 12/31/2023 12/31/2024 12/31/2025 12/31/2026 12/31/2027 12/31/2027
Year Fraction 0.25 1.00 1.00 1.00 1.00 -

EBIT 4,225 3,370 2,143 317 1,832

Less: Cash Taxes (1,056) (843) (536) (79) (458)
NOPAT 3,169 2,528 1,607 237 1,374
Plus: D&A 57 60 63 66 69
EBITDA 4,282 3,430 2,206 382 1,901
Less: Capex 500 750 700 - 500
Less: Changes in NWC 570 169 219 287 364
Unlevered FCF 2,156 1,669 751 16 579 2,594,400

Transaction FCFF - 539 1,669 751 16 579 -

IRR FCFF (282,000) 539 1,669 751 16 579 -

Intrinsic Value Enterprise Value Rate of Return

Enterprise Value 307,379 282,000 IRR
Plus: Cash 56,298 56,298
Less: Debt 81,677 81,677
Equity Value 282,000 307,379

Equity Value/Share 282.00 282.00

 Forecast Period Stub
2025 2026 2027 2028 Historical Forecast
ok ok ok ok
12/31/2025 12/31/2026 12/31/2027 12/31/2028 9/30/2023 12/31/2022
365 365 365 366 273 (273)
- - - - 0.750 (0.750)

30.0% 30.0% 30.0% 30.0% 30.0% 30.0%

44.0% 44.0% 43.0% 43.0% 45.0% 45.0%
5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
18.0% 18.0% 18.0% 18.0% 18.0% 18.0%
20 20 20 20 20 20
66 66 66 66 66 66
50 50 50 50 50 50
- (4,000) - - -
- - - - - -
200 - - 200 - -

0.25 0.25 0.25 0.25 0.25 0.25

0.44 0.44 0.43 0.43 0.45 0.45
0.06 0.06 0.06 0.06 0.06 0.06
0.12 0.12 0.12 0.12 0.12 0.12
0.15 0.15 0.15 0.15 0.15 0.15
20 20 20 20 20 20
66 66 66 66 66 66
50 50 50 50 50 50
0 -4000 0 0 0
0 0 0 0 0 0
150 0 0 150 0 0
 30.0% 30.0% 30.0% 30.0% 30.0% 30.0%
44.0% 44.0% 43.0% 43.0% 45.0% 45.0%
5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
18.0% 18.0% 18.0% 18.0% 18.0% 18.0%
20 20 20 20 20 20
66 66 66 66 66 66
50 50 50 50 50 50
- (4,000) - - - -
- - - - - -
200 - - 200 - -

12,927 16,804 21,846 28,400 5,737 1,912

5,688 7,394 9,394 12,212 2,581 860
7,239 9,411 12,452 16,188 3,155 1,052

646 840 1,092 1,420 287 96

917 1,009 1,110 1,221 568 189
5676 7562 10250 13547 2,300 767

63 66 69 73 43 14
5613 7496 10181 13475 2,257 752

8,291 7,891 7,891 7,891 6,219 2,073

(2,679) (396) 2,290 5,583 (3,961) (1,320)

-536 -79 458 1117 -792 -264

(2,143) (317) 1,832 4,467 (3,169) (1,056)
 56,833 69,882 78,924 103,991 53,193 56,298
708 921 1,197 1,552 420 419
1,028 1,337 1,699 2,202 624 622
58,570 72,140 81,819 107,745 54,238 57,339
90,332 20,015 112,411 46,511 1,369 14,591
1303 1564 1876 2252 2702 3242
150,205 93,718 196,107 156,507 99,956 33,319

115,949 63,442 165,724 121,198 45,157 15,052

779 1,013 1,287 1,668 354 118
116,728 64,455 167,011 122,866 45,510 15,170
30,000 26,103 24,104 24,183 82,914 66,625
146,728 90,558 191,115 147,049 95,479 31,826

127 127 127 127 127 127

3,350 3,033 4,865 9,331 4,382 1,461
3,477 3,161 4,992 9,458 4,477 1,492
150,205 93,719 196,107 156,508 99,956 33,319

0 0 0 0 -0 -0

-2143 -317 1832 4467 -3169 -1056

63 66 69 73 43 14
219 287 364 477 691 233
(2,299) (538) 1,537 4,062 (3,817) (1,275)

(92,011) (110,413) (132,496) (158,995) (47,922) (15,974)

95,000 120,000 140,000 180,000 60,000 20,000
2,989 9,587 7,504 21,005 12,078 4,026

0 4000 0 0 0 0
 - 4,000 - - - -

690 13,049 9,041 25,068 8,261 2,751

56,143 56,833 69,882 78,924 44,933 53,193
56,833 69,882 78,924 103,991 53,193 55,944

708 921 1197 1552 420 419

1028 1337 1699 2202 624 622
779 1013 1287 1668 354 118
958 1,245 1,609 2,086 691 924
219 287 364 477 691 233

1,616 90,332 20,015 112,411 46,511 1,369

92,011 110,413 132,496 158,995 47,922 15,974
(63) (66) (69) (73) (43) (14)
90,332 20,015 112,411 46,511 1,369 14,591

82,914 82,914 78,914 78,914 82,914 82,914

- (4,000) - - - -
82,914 78,914 78,914 78,914 82,914 82,914
8,291 7,891 7,891 7,891 6,219 (6,219)
Terminal Value
EV/EBITDA 2,594,400

-76%