Valuation & Restructuring Services | Nainit Savla & Associates

Valuation & Restructuring Services

Q: What is the difference between a registered valuer and a CA providing valuation?

A CA can provide valuations for many purposes but for statutory valuations (NCLT, IBC, Rule 11UAB income tax) the valuer must hold IBBI registration in the relevant asset class — obtained after passing the IBBI valuation examination. A CA without IBBI registration cannot certify statutory valuation reports.

Q: What are the three asset classes for IBBI registered valuers?

Three IBBI asset classes: (a) Securities or Financial Assets (SFA) — shares, debentures, derivatives, bonds; (b) Land and Buildings (L&B) — residential, commercial, industrial, agricultural property; (c) Plant and Machinery (P&M) — equipment, machinery, vehicles, tools.

Q: What valuation standards must IBBI registered valuers follow?

IBBI registered valuers must follow IBBI valuation standards — based on International Valuation Standards (IVS) — using prescribed valuation approaches (market, income, cost) with full disclosure of basis of value, valuation date, assumptions, and limitations.

Q: When is a fairness opinion required in a merger transaction?

NCLT merger schemes require a registered valuer report on the share exchange ratio. SEBI rules require fairness opinions for listed company delisting and takeover transactions. Boards increasingly commission them to demonstrate independent financial judgment and fulfil fiduciary duties.

Q: What is purchase price allocation (PPA) and why is it required?

PPA under Ind-AS 103 allocates acquisition consideration to the fair values of identifiable assets (including unrecorded intangibles) and liabilities, with the residual as goodwill. Requires registered valuer fair value assessment. Inaccurate PPA results in misstated goodwill and incorrect amortisation.

Accurate, independent valuation is the foundation of every significant financial decision — whether you are completing a merger, issuing shares to investors, complying with FEMA pricing guidelines, structuring a tax-neutral reorganisation, resolving a shareholder dispute, or reporting fair values under Ind-AS. The Companies Act, 2013 and its allied regulations have formalised the valuation profession in India through the Registered Valuer framework — making independent, IBBI-registered valuation mandatory for a growing number of statutory and regulatory purposes. We provide comprehensive valuation and corporate restructuring advisory services through our team of registered valuers and finance professionals.

Valuation Services

Business valuation, enterprise valuation, and equity valuation for M&A, fundraising, ESOP, sweat equity, FEMA compliance, income tax, and corporate restructuring purposes — using DCF, comparable companies, and asset-based methodologies.

Registered Valuer Services

Statutory valuations by IBBI-registered valuers under Rule 11UAB of the Income Tax Act, Section 247 of the Companies Act — for FEMA share price certification, NCLT merger fairness opinion, and other mandated valuation assignments.

Financial Asset Valuation

Valuation of financial instruments — equity shares (listed and unlisted), preference shares, debentures, derivatives, convertible instruments, AIFs, and portfolio company valuations — for statutory, accounting, and transaction purposes.

Land & Building Valuation

Valuation of residential, commercial, industrial, and agricultural properties — for NCLT merger proceedings, FEMA compliance, insurance, balance sheet restatement, and transaction purposes by registered property valuers.

Plant & Machinery Valuation

Valuation of manufacturing plant, equipment, machinery, tools, and engineering assets — for insurance, balance sheet purposes, merger schemes, loan security assessment, and asset purchase transactions by registered technical valuers.

Intangible Asset & Goodwill Valuation

Valuation of patents, trademarks, copyrights, customer relationships, non-compete agreements, technology, software, and goodwill — for purchase price allocation, Ind-AS 103 business combination accounting, and impairment testing.

The Registered Valuer Framework in India

The Companies Act, 2013 (Section 247) introduced the concept of Registered Valuers — professionals registered with the Insolvency and Bankruptcy Board of India (IBBI) under the Companies (Registered Valuers and Valuation) Rules, 2017. Registered Valuers are qualified professionals who have passed the IBBI valuation examination and are registered in one or more of the three asset classes: Securities or Financial Assets (SFA), Land and Buildings (L&B), and Plant and Machinery (P&M). Under Rule 11UAB of the Income Tax Act (introduced by the Finance Act, 2023), most mandatory valuations for income tax purposes must now be conducted by IBBI-registered valuers — replacing the earlier regime where valuers were category-specific (registered civil engineer for property, CA for shares, etc.).

When Registered Valuer Reports Are Mandatory in India

Issue of shares at premium — valuation under Rule 11UA / 11UAB for income tax purposes (Section 56)
FDI and FEMA — share pricing certification for FDI transactions under RBI guidelines
ESOP and sweat equity — fair market value determination for accounting and tax purposes
NCLT merger schemes — registered valuer report on share exchange ratio fairness
IBC CIRP — liquidation value and fair value of corporate debtor's assets by registered valuer
IBC voluntary liquidation — asset valuation by registered valuer for distribution to creditors
Ind-AS 103 — fair value of identifiable assets acquired in a business combination (PPA)
Section 185/186 inter-corporate loans — valuation where loans are made at below-market rates

Frequently Asked Questions

What is the difference between a registered valuer and a CA providing valuation?

Prior to the Companies (Registered Valuers and Valuation) Rules, 2017, Chartered Accountants were widely used for share valuations and company valuations in India. The new framework requires that valuations for specified statutory purposes must be conducted by IBBI-registered valuers — who have passed the IBBI valuation examination and are registered in the relevant asset class. A CA can be a registered valuer (in the Securities or Financial Assets class) if they have passed the IBBI examination and obtained registration. However, a CA who has not obtained IBBI registered valuer status cannot issue valuation reports for statutory purposes requiring registered valuer certification — such as NCLT proceedings, IBC valuations, and Rule 11UAB income tax valuations.

What are the three asset classes for IBBI registered valuers?

The IBBI recognises three asset classes for registered valuer registration: (a) Securities or Financial Assets (SFA) — covering equity shares, preference shares, debentures, derivatives, bonds, mutual fund units, and other financial instruments; (b) Land and Buildings (L&B) — covering residential, commercial, industrial, agricultural, and specialised properties; and (c) Plant and Machinery (P&M) — covering manufacturing plant, equipment, machinery, tools, vehicles, and other tangible movable assets. A registered valuer may hold registration in one or more asset classes — subject to having the relevant educational and professional qualifications and having passed the separate IBBI examination for each asset class.

What valuation standards must IBBI registered valuers follow?

IBBI registered valuers must conduct all valuations in accordance with the valuation standards issued by the IBBI under the Companies (Registered Valuers and Valuation) Rules, 2017. The IBBI has adopted the International Valuation Standards (IVS) issued by the International Valuation Standards Council (IVSC) as the basis for its registered valuer standards. Valuations must follow the prescribed valuation approaches (market approach, income approach, cost approach), appropriate methodologies within each approach, and disclosure requirements — including the basis of value, valuation date, key assumptions, and limitations. Departure from IVS-aligned standards must be disclosed and justified in the valuation report.

When is a fairness opinion required in a merger transaction?

A fairness opinion is a formal statement by an independent financial advisor — typically an investment bank or a registered valuer firm — that the financial terms of a transaction are fair to a specified party (usually the target company's shareholders or a class of creditors). In Indian M&A: (a) NCLT merger schemes under Section 230-232 require a registered valuer report on the share exchange ratio and the basis for the scheme consideration — which effectively serves as a fairness opinion; (b) SEBI's Delisting Regulations and Takeover Code require independent fairness opinions for specific listed company transactions; (c) boards of directors increasingly commission fairness opinions for significant acquisitions or sell-side transactions to demonstrate that they have exercised independent financial judgment and fulfilled their fiduciary duties.

What is purchase price allocation (PPA) and why is it required?

Purchase Price Allocation (PPA) is the accounting exercise required under Ind-AS 103 (Business Combinations) following an acquisition — where the total consideration paid for the acquired business is allocated to the fair values of all identifiable assets acquired (both tangible and intangible) and liabilities assumed, with any residual amount recognised as goodwill. PPA requires a registered valuer's fair value assessment of each identifiable asset — including intangible assets (customer relationships, brand, technology, non-compete agreements) that may not appear on the target's balance sheet at all. Inaccurate or incomplete PPA results in misstated goodwill, incorrect amortisation charges, and potential audit qualifications — making engagement of experienced registered valuers for PPA a critical post-acquisition priority.

Expert Valuation & Restructuring Advisory

Registered valuer services across all asset classes — financial assets, land and buildings, plant and machinery, intangibles, and goodwill — for statutory, M&A, and restructuring purposes across India.

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