Tangible book value

Shareholders' equity minus goodwill and other intangible assets. What is left if everything that cannot be sold separately is written off.

A company with ₹3,300 crore of equity, ₹650 crore of goodwill and ₹180 crore of intangibles has ₹2,470 crore of tangible net worth.

Lenders think in these terms, and loan covenants are frequently written against tangible net worth rather than reported equity, because goodwill offers no recovery in a liquidation.

The measure is harsh on companies that grew by acquisition and generous to those that built the same capability internally and expensed it. Neither treatment reflects economic reality precisely.

Use it as a floor, not a valuation.