  A combined study employing density functional theory (DFT) using the
experimentally determined modulated structures and bulk-sensitive hard x-ray
photoelectron spectroscopy on single-crystalline Ni$_2$MnGa is presented in
this work. For the aforementioned modulated structures, all of the
characteristic features in the experimental valence band (VB) are in excellent
agreement with the theoretical VB calculated from DFT, evincing that it is the
true representation of Ni$_2$MnGa in the martensite phase. We establish the
existence of a charge density wave (CDW) state in the martensite phase from the
shape of the VB near $E_F$ that shows a transfer of spectral weight in
excellent agreement with DFT. Furthermore, presence of a pseudogap is
established by fitting the near $E_F$ region with a power law function
predicted theoretically for the CDW phase. Thus, the present work emphasizes
that the atomic modulation plays an important role in hosting the CDW phase in
bulk stoichiometric Ni$_2$MnGa.
