The honest disclaimer
Unlisted valuation is more art than science. Unlike listed equities where a price is quoted every second, private companies require *triangulation* across several methods. Pick one method and anchor on it and you'll be wrong; use a handful and triangulate and you'll land in a reasonable zone.
1. Last-round price (easy but lazy)
Take the per-share price from the most recent funding round and extrapolate.
When it works: The round was recent (<6 months), large (>₹100Cr), and from a tier-1 fund doing genuine price discovery (not an insider bridge).
When it breaks: A 2022 unicorn round from the ZIRP era is not a 2026 fair value. Always age-adjust by the peer-group correction.
2. Revenue multiple (comparable companies)
Revenue × multiple observed in listed peers × private-market discount (typically 20–40%).
For a SaaS business with ₹100Cr ARR and listed peers trading at 8× revenue, a rough private value = 100 × 8 × 0.70 = ₹560Cr.
When it works: The company has meaningful revenue (not pre-revenue), peer set is clearly identifiable, and the growth profile is roughly comparable.
When it breaks: Loss-making high-growth companies where multiples are meaningless; regulated sectors where peers aren't really peers.
3. EBITDA multiple
Same method, using EBITDA × multiple. More conservative and preferred for mature businesses (NSE, traditional NBFCs, blue-chip unlisted).
Rule of thumb: 12–18× for stable profitable private companies. Apply a 15–25% private-market discount vs listed peer multiples.
4. DCF (discounted cash flow)
Project 5–10 years of free cash flow, terminal-value it, discount back at an appropriate WACC (typically 12–16% for Indian private equity).
When it works: Mature, cash-generating businesses where you have visibility into future margins.
When it breaks: Early-stage companies — the terminal value dominates and you're really just guessing.
5. Scorecard method (for early-stage)
Benchmarks qualitative factors (team, market size, product/tech, traction, moat, execution risk) against a comparable reference company. Produces a multiplier you apply to a base valuation.
When it works: Seed/Series A where financials don't yet exist and judgement is the only input.
The triangulation discipline
On every share Polemarch lists, we publish:
- Last-round date + price
- Current grey-market observed trades (anonymised ranges)
- Listed-peer revenue + EBITDA multiples
- Calcula-derived DCF where applicable
Look at all four and form your own view. If the asking price is at the *upper* end of every method, that's your signal to wait.