I am not sure if you are referring to any specific case but you can perhaps look at a stock like Jet Airways that has shut operations in April this year and has not been flying ever since. The question is how do you value such stocks like Jet Airways. Normally, equity valuation is done through the projection of future flows and then applying a discount rate to value the cash flows to the present. But the problem is that you cannot apply that logic to a company like Jet Airways since there no operations to talk about.

In such cases, you can use two factors to value the company. The first is to value the company based on the residual value of the assets like the aircraft that it owns, its parking and landing rights at airports, the value of its loyalty schemes, its customer base, brand value, etc. The sum of all these items can be the value of the firm. The second way to value such companies is to look at the replacement value. For example, how much will it cost to start a Greenfield airline business from scratch versus buying out the existing airline? That can give you a guide to valuing such companies. However, valuing companies without operations can be quite tricky at times.