IIM Rohtak Finance Case Competition 2022 — National 1st Runner Up Deck: Smart Beta Finance Case Study - ZCP IPO Valuation Deck

ZCP is a Singapore-founded private equity firm established in 2010 with $3.5 billion in AUM. The firm generates revenue across management fees ($85 million), performance fees ($50 million), and investment income ($55 million), totalling $190 million in 2022. The objective is to evaluate whether ZCP should proceed with an initial public offering to address institutional investor liquidity needs and fund expansion into Southeast Asian technology, healthcare, and private debt markets. The analysis utilizes Discounted Cash Flow (DCF) stress testing across optimistic, normal, and pessimistic scenarios alongside relative valuation metrics using EV/EBITDA and P/E multiples. Key valuation inputs include a WACC of 10.16% (derived from a cost of equity of 12.45% and cost of debt of 4.8%) and sector-specific beta metrics to model cash flow trajectories through 2027. The study recommends proceeding with the IPO with caution. Public listing provides necessary liquidity for limited partners while lowering future capital costs. Recommendations highlight expanding into underbanked private debt markets, mitigating tech valuation volatility of 15-20%, and navigating regulatory compliance costs that increase expenses by 20-30%. The DCF model yields an Enterprise Value of $3.1 billion, an Equity Value of $2.9 billion, and an optimistic share price of $29 ($25.8 in the pessimistic scenario), supported by projected EBIT growth from $99.7 million in 2022 to $132.7 million in Free Cash Flow to Firm by 2027.