Investment Valuation in India

Here are some valuation updates that have been reported in the global media. Stripe Payments services startup Stripe, founded by brothers Patrick and John Collison has taken another round of funding from Visa. The companies enables the apps and online stores to take payments from anybody, anywhere. It works with online companies that accepts payments through Credit cards while being totally invisible to end users. Visa has bought a stake in Stripe that values the company at $5 Billion and will leverage on Stripe's technical expertise to work on new kinds of digital payments. This is at a time when Visa is facing competition from organisations which are more mobile friendly when it comes to digital payments. On the other hand, Stripe will leverage on Visa's security systems to protect the users' financial information.   

Generally speaking, value is often used to refer to the "price" at which the asset is sold in the market. However, particularly, in case of investment analysis, the price of the asset is different from its intrinsic value. Let's understand this in simple terms. If you've been walking in the desert without water for 2 days, you'd be dying of thirst. In such situation, a glass of water would be invaluable for you. Although the price of a water bottle is Rs 20, you could be willing to pay even Rs 100 for this bottle. So for you, while the price is Rs 20 but its value could be as high as Rs 100. The Investment characteristics of the asset are major determinants of value. The Intrinsic Value of any asset is the value of the asset assuming that the valuer (analyst or investor) has complete understanding of the asset's investment characteristics. For any investor, the intrinsic value reflects his true value of the asset.