Valuation & Finance
Related Party Transaction (RPT) Adjustment
Re-pricing of revenue/cost items transacted with promoter-affiliated entities at market rates, to normalize the target's true standalone profitability.
Buyer Example
A Bengaluru packaging company sources 40% of raw material from a promoter-owned sister entity at 15% above market rate. Buyer re-prices this to arm's-length terms during diligence, adding back ₹90 Lakh to normalized EBITDA but flagging future supplier-dependency risk once the promoter relationship ends.