Hi Hitesh,
I am afraid this is like putting the cart in front of the horse.
The question to ask is whether Gruh can raise fresh equity at CMP. The hypothetical situation of whether Gruh will be overvalued / undervalued after raising fresh equity, arises only after Gruh is able to successfully raise fresh equity at CMP.
It is the same question facing Flipkart types today. Question is whether they can go for an IPO and raise fresh equity at $15 billion - $20 billion valuation today... The hypothetical question of whether they will be overvalued / undervalued after raising equity in the IPO is a moot question.
Anyways, can you show a calculation of how the valuation would look like, if Gruh is able to raise fresh 30% equity at CMP.... Requesting this as I think the calculation by @richdreamz to illustrate this was probably not what you meant (that calculation is completely misleading, I am afraid)... If I think I understood you - you are trying to say that P/BV will be between 8 - 9 on a 1 year forward basis.... Why is that leading to a conclusion that Gruh is undervalued / fairly valued....
