Commercial Due Diligence/Investment Feasibility Studies

Transaction Advisory > Consumer, Product and Retail > Commercials Due Diligence / Investment Feasibility Studies

Valuation Assistance for a International Fabric Manufacturer

About the Client

The client, a leading international textile company, engaged in the manufacturing of shirting and sportswear fabrics wanted to conduct a comparative study with Indian players operating in similar segment from valuation perspective.

Project Objectives:

The key objectives of the study included:

What is the business profile of various players comparable to client in terms of – product profile, price positioning, manufacturing competencies, sales & distribution network, etc.?
What are the key shortlisting/ filtering parameters to arrive at most comparable companies?
Which are the primary and secondary comparable companies?

Deliverables:

As-is-analysis of client’s company was conducted to understand its positioning and operations to identify most comparable companies in India. The key vectors of study included business segment in India, key markets & sales channel, product mix, past sales in value & volume, manufacturing competencies, etc.
Based on in-depth analysis and differentiating aspects of client’s company, “Filters” were defined to create a long list of companies and arrive at first shortlist of companies.
A long list of companies was created, out of those few were shortlisted for final evaluation after multiple filtrations on parameters like similar product segments, turnover & profitability, focus business segment, profit share from textile business, etc.
Evaluation of shortlisted companies was conducted on identified parameters to arrive at best comparable for client’s company. The identified parameters included share of fabrics in revenue, share of shirting, presence in retailing, manufacturing capacities, level of integration, price positioning, etc.
A scorecard assessment was done on identified parameters to arrive at few primary and secondary comparable companies and a detailed profiles of these companies was also provided.

Techno-Commercial Evaluation of a Manufacturing Company

About the Client

The client, one of the leading financial services company, was planning to invest in a manufacturing company. The client wanted Wazir to conduct market potential assessment of company’s product segments along with detailed technical assessment of the factories.

Project Objectives:

The core objective of the project was to conduct a techno-commercial evaluation of a manufacturing company, answering key questions like:

What is the current market size & future potential for concerned segment?What is the demand-supply scenario? What are the key challenges?
What is the machinery/manufacturing facility condition? What is the technology advancement used by the company? What are the challenges in terms of infrastructure?
What are the investment requirements? Is it financially viable & sustainable? What kind of top-line & bottom-line can the business expect over next 5-7 years?

Deliverables:

Detailed market assessment: mix of primary & secondary research was conducted to obtain following inputs-
1. In-depth assessment of demand side was provided covering aspects like:
  1. Current production, consumption & historical growth; Export-import scenario
  2. Future demand projections which included macro & policy trends affecting market in long term, benchmarking of the existing product consumption cycle with that in other countries in past, de-growth factors, etc.
2. Business environment analysis: ideal Indian business ecosystem was analyzed for the concerned product segment/ application that included:
  1. Detailed supply chain analysis across all intermediaries (manufacturers, end user, other intermediaries)
  2. Identified key purchase influencers impacting selection & usage of concerned category/ business
  3. Regulatory & policy framework; imports tariffs, non-tariff barriers, duties, etc. were also analyzed
3. Competition Assessment: major suppliers of identified product segments in Indian market were studied in detail in terms of their product offerings, sales & distribution channels, product specs, price range, business strengths, etc.
Detailed techno-commercial assessment: an in-depth assessment was conducted through a factory visit and by evaluation of physical conditions of the existing infrastructure/ machinery. It included:
1. Evaluation of the machines being used, their age, working condition, maintenance, availability of spare parts, production capacities, etc.
2. Manufacturing process & operation systems were also reviewed for different product categories
3. Provided detailed break up & assessment of operating cost covering labor, raw material, power, repairs & maintenance, utilities, outsourcing / subcontracting expenses, etc. and input-output norms. Analyzed other costs as well
4. Provided financial viability & future prospects of the company

Beauty and Wellness Market Mapping & Business Operation Review

About the Client

A leading investment firm which manages approximately $2 billion of funding across five growth sectors was considering making a strategic investment into one of the biggest beauty and wellness chains in the country.

Project Objectives:

Core objective was mapping of Beauty and Wellness market in India and business plan review of potential investee company, answering the following key strategic questions:

What is the brand equity of Investee Company?
What is the growth potential in this segment for Investee Company?
What is the scope of growth for additional product categories?
Is the new segment of beauty & wellness products profitable for Investee Company as was the services segment?

Deliverables:

Provided detailed analysis of Indian beauty & wellness market to understand the overall market, competition, consumers and positioning of the ‘target chain’.
Identified current positioning and penetration levels of the ‘target chain’ (services as well as products)
Determined growth potential for the ‘target chain’:
1. key markets for next phase of growth
2. saturation level in existing markets
3. potential for entry into selected new markets
Evaluated various business operations of the chain across the spectrum of products and services offered. Further, defined the scope of future growth potential for the chain and strategies to maximize same store sales.

Market Mapping & Identification of Growth Potential for Hand Woven Products Brand Across Various Indian Cities

About the Client

A leading investment firm which manages approximately $2 billion of funding across five growth sectors was considering making a strategic investment into one of the biggesthand woven apparel and lifestyle brandin the country.

Project Objectives:

Core objective was market mapping & identification of growth potential for investee brand stores across various Indian cities, answering the following key strategic questions:

What is the brand equity of the ‘target chain’?
Is there any growth potential in the handloom market segment or is the market saturated?

Deliverables:

Provided detailed analysis of handloom/ hand woven products market in Metros, Tier 2&3 cities and Micro markets to understand the overall market, competition, consumers and positioning of the ‘target chain’.
Identified current positioning and equity of the investee brand
Determined growth potential for the investee brand:
1. key markets for next phase of growth
2. saturation level in existing markets
3. potential for entry into selected new markets
Evaluated various business operations of the chain across the spectrum of products and services offered.