DotCom Companies ? How Much Are They Really Worth ?
Written by aditya on May 16, 2008 – 3:21 am -I made this post after looking at some of the public dotcom companies like Naukri.com (Info edge India Limited). The figures actually shocked me off when we compare it to other listed companies on Bombay Stock Exchange (BSE) or any other stock exchange on earth.
The figures infact are very good to look at for other dot com entrepreneurs too. Here is the brief approximate figure -
Annual Net Profit After Tax (Ending March 2008) : 27 Crores
Total Number Of Equity Shares Listed : 27 Crore Shares Approx
Price Per Share As Of Today : 1000 Rupees (Averaged over past few trading sessions)
Market Cap (Company Value) : 2700 Crores
Average P/E Ratio : 100 Times
(Figures have been rounded off to come at a rough conclusion).
So we find the P/E Ratio around 100. What does that mean actually ? It means that if someone buys a share of the company , he pays 100 years worth of profits per share. In other words, if someone wants to buy the whole company along with the brand, he has to pay for 100 years profits. It includes intellectual property , brand value, future prospects and everything else. Now compare this with average P/E ratio of other companies listed. Most are 20 - 25. The best brands like Reliance Industries has 25 - 30 approx. And moreover this is not the first company to have this. Companies which have prospects of scaling up have such high values. Mr. Sanjeev Bikhchandani , Founder and Chairman owns approx 52% of shares which makes him worth around 1500 crores. The company’s profit after tax (PAT) is around 2.5 crores every month.
This just gives an idea about how much potential a dot com company has ! If you have a well branded website or a group of sites or portals which are popular and are used enough by people, which fills a large market gap or which solves a problem, has a good domain name and enough traffic and usability and finally is one which has a capacity to scale up quickly, you are going to be worth billions.
Cheers !!
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