Determination of Value of a Public Limited Company: A Case Study of Grameenphone Limited

Abstract

This is an internship report which is a result of my three months’ work experience at the research department of UCB Capital Management Ltd. UCB Capital Management Ltd is one of the stock broker company in Bangladesh which is a subsidiary of United Commercial Bank (UCB) Limited. The report is title as “Determination of Value of a Public Limited Company: A Case Study of Grameenphone Limited”. During my internship period I have learnt many things like how to prepare daily and weekly DSE market report, weekly NAV of mutual funds, yearly & monthly changes in earning per share and my supervisor helped me developing the valuation model. This report comprises four chapters. The first chapter is an Introduction to the report which consists of Introduction, Origin of the report, Objectives of the report, Scope of the Report, Methodology of the report, Sources of Data, Limitations of the report. Second chapter consists of industry overview, company overview and business overview of GP. The industry overview includes the description of telecom industry which is done through PESTEL analysis. The company overview includes a short description of GP and a short business description of GP is given in the business overview. In the third chapter, how valuation of GP is done, is described. Also some financial ratio of GP has been analyzed. The valuation of GP has been done on the basis of assumption. Three valuation method has been used: DCF valuation method, P/E multiple method, and EV/ EBITDA Multiple method. More weight given on DCF valuation method. The ratio analysis has been done taking data from 2013 to 2017 and from the forecasted year’s data 2018E to 2022E. After the valuation a target price of GP’s share for December 2019 has been recommended. And the forecasted share price of GP in December 2019 is BDT 444.75 Finally, in the last chapter of the report some concluding opinion is given through conclusion and some sources of references are given from where I have taken the information. From my perspective GP is currently undervalued, so I recommend that buying GP’s share now would be beneficial. I expect that in the future the share price of GP may rise.