Three bodies of law, three different answers about who may value the same shares
This is the question that decides the scope, the cost and the usefulness of every valuation engagement, and it is the question most published material skips. India does not have one valuation profession with one licence. It has a registered valuer regime under company law, a separate certifier list under exchange control, a securities regulator that changed its own answer at the start of 2026, and an insolvency regulator that adopted an international standard in April 2026. A single cross-border funding round can need two different reports from two different professionals, and neither of them substitutes for the other.
- The registered valuer regime under section 247 of the Companies Act 2013, and the three asset classes
- Where company law actually requires a registered valuer, and where people wrongly assume it does
- Why exchange control does not accept a registered valuer's certificate
- What changed in December 2025, February 2026, April 2026 and June 2026, and what is still only a Bill
The registered valuer, and what registration actually covers
Section 247 of the Companies Act 2013 provides that where a valuation is required under that Act in respect of any property, stocks, shares, debentures, securities, goodwill, net worth or liabilities of a company, it is to be done by a person registered as a valuer. The section came into force on 18 October 2017, the same day the Companies (Registered Valuers and Valuation) Rules 2017 were notified. The Central Government specified the Insolvency and Bankruptcy Board of India as the Authority under section 458 of the Act, which is why a company law valuation regime is administered by the insolvency regulator.
The single most practical thing to understand about registration is that it is by asset class, not general. There are three:
- Land and Building
- Plant and Machinery
- Securities and Financial Assets
A valuer registered for Plant and Machinery is not qualified, for the purposes of the Act, to value your shares. A valuation of a business that owns significant real estate and significant equipment may require more than one registered valuer, each within their own class, which is a scoping question worth settling at the start rather than discovering when the report is assembled.
Registration requires membership of a Registered Valuers Organisation recognised by IBBI, passing the IBBI valuation examination, and meeting the qualification and experience thresholds in the Rules. A partnership or company applying to be registered must have registered valuers among its partners or directors for the relevant asset class. Section 247 also carries an independence requirement: a valuer must not have a conflict of interest with the company.
The statutory consequences are significant. A registered valuer who contravenes section 247 or the applicable rules is exposed to civil penalties and, where the contravention is committed with intent to defraud, criminal liability including imprisonment. Following conviction, the valuer may also be required to refund the remuneration received and compensate the company or other affected persons for losses caused by incorrect or misleading statements in the valuation report.
That is the reason a competent valuer will decline an engagement where the fee is contingent on the outcome, or where the same firm is advising on the transaction the valuation supports.
Where the Companies Act genuinely requires a registered valuer
The list below is the one we are prepared to state. Each is a place where the requirement is well established across independent sources.
| Situation | Where it sits |
|---|---|
| Further issue of shares on a preferential basis, to determine the price | Section 62(1)(c), read with the Companies (Share Capital and Debentures) Rules 2014 |
| Private placement of securities | Section 42 and the same Rules |
| Non-cash transactions involving directors, to value the assets involved | Section 192 |
| A scheme of compromise, arrangement, merger or amalgamation, to support the share exchange ratio | Sections 230 to 232 |
| Purchase of a minority shareholding by an acquirer holding 90 per cent or more | Section 236 |
| Valuation of assets and liabilities in a winding up | Section 281 |
Two places where a registered valuer is commonly assumed and is not required
Both of these appear routinely in professional firms' own material as though they were statutory triggers. Neither is.
Share buy-back under section 68. A buy-back is not, by itself, a transaction for which the Companies Act requires a registered valuer's report. The statutory regime is built on the declaration of solvency under section 68(6), the auditor's report or certificate supporting it, and compliance with the applicable provisions of the Act and, for a listed company, the SEBI buy-back regulations. A company may still choose to obtain an independent valuation to support the price, to help the board discharge its duties, or to reduce the risk of a minority shareholder challenge. That is a governance decision, and in some fact patterns a sensible one, but it is not a legal requirement.
An independent valuation for a material related party transaction of a listed company. Regulation 23 of the listing regulations is an identification, materiality, approval and disclosure provision. It does not require a valuation report for every material related party transaction. The related party transaction industry standards in force since 1 September 2025 require management to place before the audit committee a valuation report, fairness opinion or other external report if any has been obtained, wording that assumes one may not exist. In practice an audit committee will often want an external valuation or a fairness opinion where the transaction turns on price or on the arm's length question, particularly a transfer of shares, a business undertaking or an intangible asset. That is transaction-specific governance, not a general statutory requirement.
A registered valuer's certificate does not satisfy FEMA
This is the single most expensive misunderstanding in Indian valuation practice, and it costs time rather than money: a filing goes in, the certificate is from the wrong professional, and the round slips.
Rule 21 of the Foreign Exchange Management (Non-debt Instruments) Rules 2019 governs the price at which equity instruments may be issued to, or transferred to or from, a person resident outside India. For an unlisted Indian company the price must be worked out using an internationally accepted pricing methodology on an arm's length basis, duly certified by a Chartered Accountant, a Merchant Banker registered with SEBI, or a practising Cost Accountant. A registered valuer under section 247 of the Companies Act is not on that list. A registered valuer's certificate does not by itself satisfy Rule 21 unless the person signing it also falls within one of those three categories. The exchange control regime prescribes its own certifiers and is independent of the Companies Act regime.
The practical consequence for a cross-border round is that you need two things, not one:
- a registered valuer's report, because the issue of shares is a further issue under company law, and
- a separate pricing certificate from a chartered accountant, merchant banker or cost accountant, for the exchange control filing.
The same professional may hold both capacities, and often does, but the two reports answer to different rules and neither is a substitute for the other.
Share swaps are narrower still
Where the consideration is shares rather than cash, Rule 21 prescribes a separate requirement. Irrespective of the amount involved, the valuation in a swap arrangement must be carried out by a Merchant Banker registered with SEBI, or by an investment banker outside India registered with the appropriate regulatory authority in the host country. The broader certifier list that applies to cash transactions does not apply to a swap, so a chartered accountant's certificate is not sufficient, and there is no threshold below which this relaxes.
Listed companies
Where the Indian company is listed, Rule 21 does not send you to an independent valuation at all. The price is the price worked out under the applicable SEBI regulations, which is covered in Guide 2.
What is proposed, and what is still the law
The Non-debt Instruments Rules 2019 are proposed to be replaced by the draft Foreign Exchange Management (Foreign Investment) Rules 2026, released by the Reserve Bank of India for public consultation on 21 July 2026, with comments invited until 31 August 2026. At draft stage the pricing framework substantially retains the existing certifier categories, so the practical answer above is not expected to change even though the rule numbers will.
The draft has not been notified into force. The current legal position continues to be governed by the 2019 Rules, and nothing in this section should be read as describing settled law until the final rules are issued.
SEBI moved two requirements onto registered valuers, notified December 2025 and effective January 2026
This is recent enough that a great deal of otherwise reliable material still describes the previous position, so it is worth stating precisely.
Open offer pricing for infrequently traded shares
Under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011, where the target's shares are infrequently traded, the open offer price is determined by valuation rather than by market price. Until the end of 2025 that valuation was to be determined by the acquirer and the manager to the offer, or, where SEBI directed, by an independent merchant banker or an independent chartered accountant of at least ten years' standing.
The SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations 2025 replaced that with an independent registered valuer. The amendment was gazetted on 3 December 2025, published by SEBI on 5 December 2025, and came into force on 2 January 2026, being the thirtieth day after gazette publication. It carries a nine month transitional arrangement allowing a valuation assignment already commenced before that date to be completed by the previously eligible professional.
If you are relying on an article, a checklist or a precedent document written before 2026 for open offer valuation, check it. This is the most likely single place for a stale requirement to be carried into a live transaction.
Sweat equity
Regulation 34 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations 2021 requires the valuation of the know-how, intellectual property rights or value addition for which sweat equity shares are issued to be carried out by an independent registered valuer. This too replaced a merchant banker requirement, by the SEBI (Share Based Employee Benefits and Sweat Equity) (Second Amendment) Regulations 2025, gazetted on 3 December 2025, published by SEBI on 4 December 2025 and effective on 2 January 2026. A merchant banker already entrusted with a sweat equity valuation before that date may complete it within nine months from 2 January 2026.
The two changes therefore moved together: same gazette date, same commencement, same nine month transition.
What SEBI does not require
Worth stating because it is frequently assumed: the same regulations leave a company free to determine the exercise price of an employee stock option, subject to conforming to the applicable accounting policies. There is no SEBI mandated independent valuation of an option exercise price. The valuation work that does get done on employee stock options is an accounting fair value exercise for the share based payment charge, which is a different requirement with a different reader. Guide 3 separates the two.
A specialist example: alternative investment funds
The SEBI framework for alternative investment funds sets its own eligibility test for an independent valuer. Following SEBI's September 2024 circular, where the independent valuer is a partnership entity or a company it must be a Registered Valuer Entity registered with IBBI, and the authorised professionals carrying out the valuation must hold membership of ICAI, ICSI or ICMAI, or hold the CFA Charter awarded by the CFA Institute.
This is included because it makes the point of this whole guide concrete: India has no single, universal concept of a valuer. It is a specialist requirement for fund portfolio valuation, not part of the general Companies Act framework, and it should not be read alongside the section 247 triggers as though it were one of them.
Which valuation standards a report is written to
Being an eligible certifier is only half the answer. The other half is which standard the work is performed to, and here India has two answers running in parallel.
International Valuation Standards, for insolvency work
By Circular No. IBBI/RV/93/2026 dated 1 April 2026, IBBI notified the International Valuation Standards, as issued and updated by the International Valuation Standards Council, as the valuation standards applicable for valuations conducted under the Insolvency and Bankruptcy Code and the regulations made under it, until further orders. That circular is addressed to registered valuer organisations, valuer entities and valuers as well as to insolvency professionals.
Read the scope carefully. It is a standard for valuations under the Code. It is not, on its face, a general mandate applying International Valuation Standards to every registered valuer engagement under the Companies Act, and it should not be described as one.
ICAI Valuation Standards 2018, for members of the Institute
The ICAI Valuation Standards 2018 are mandatory for members of the Institute of Chartered Accountants of India undertaking valuation engagements under the Companies Act 2013. For engagements under other statutes, including the income tax law, the SEBI regulations and FEMA, they are recommendatory. They took effect for valuation reports issued on or after 1 July 2018, and as at the date of this page ICAI continues to publish them as the operative valuation standards, with no superseding set identified.
The practical answer
For most commercial engagements the standard applied is a matter for the engagement letter, and a report should say on its face which standard it was prepared under. A report that does not say is harder to defend, because the reader cannot tell what the valuer held themselves to.
Insolvency valuation was rebuilt in 2026, and it is no longer a two valuer exercise
Valuation under the corporate insolvency resolution process has historically meant a resolution professional appointing two registered valuers to arrive at fair value and liquidation value, with a third brought in where the two estimates diverged materially and the final figure taken as the average of the two closest estimates.
The IBBI (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations 2026, notified on 25 February 2026, substantially restructured that framework. The amendments replaced the traditional two valuer model with a coordinated multi-valuer framework organised by asset class, each set comprising a registered valuer for every relevant asset class of the corporate debtor. Within each set a coordinating valuer computes the overall fair value after considering the estimates across asset classes and the underlying synergies. The appointment process and its timelines were revised by reference both to the resolution professional's appointment and to the insolvency commencement date, a mechanism was provided for appointing a further set of valuers where a prescribed divergence threshold is met, and the concept of fair value was updated to recognise expressly the value arising from the corporate debtor's underlying synergies. IBBI followed the amendment with guidelines for conducting valuation under the Code, issued in June 2026, prescribing report formats and setting out the duties of the registered valuer, the resolution professional and the coordinating valuer.
We have deliberately not reproduced the day counts or the divergence percentage here. Those are operational details that are easily misstated at second hand, and anyone who needs them should take them from the notified regulations rather than from a summary, this one included.
The point for anyone outside the insolvency world is narrower but still useful: if you are reading a valuation report prepared in an insolvency context, or relying on precedent from one, the methodology expected of it changed in 2026 and a report modelled on a 2024 precedent will not match the current requirement.
One thing that is not law yet, and one that quietly became law in June 2026
The Corporate Laws (Amendment) Bill 2026
A Bill is currently pending before Parliament. The Corporate Laws (Amendment) Bill 2026 proposes, among other things, to designate IBBI as the Valuation Authority under section 247 of the Companies Act 2013, with responsibility for registration, recognition of valuers' organisations, recommendations on valuation standards and regulatory oversight, in place of the present delegation under section 458. It also proposes to extend aspects of the registered valuer framework to limited liability partnerships.
It was introduced in the Lok Sabha on 23 March 2026, referred to a Joint Parliamentary Committee, and the committee presented its report on 3 August 2026. These proposals have not been enacted and do not represent the current law. Until the Bill is passed, the regime described above stands unchanged.
Worth noting for anyone who has read older material: an expert committee in 2020 proposed a National Institute of Valuers as a new unified regulator. That proposal was never enacted, and the 2026 Bill takes a different route, formalising IBBI's existing role rather than replacing it. Content describing a National Institute of Valuers as imminent is describing a road not taken.
The 2026 amendment to the Registered Valuers Rules, and why it matters less than it sounds
The Companies (Registered Valuers and Valuation) Amendment Rules 2026, G.S.R. 432(E) dated 1 June 2026, made a limited amendment to Rule 12(1)(i), strengthening the eligibility requirements for Registered Valuers Organisations. It introduced a minimum paid-up share capital of twenty five lakh rupees for an RVO, with existing organisations that did not meet it on commencement given until 31 March 2028 to comply. It came into force on publication in the Official Gazette.
It is worth naming precisely because it is easy to over-read. The amendment is directed at the governance and capital requirements of the organisations that admit valuers as members. It did not change who may act as a registered valuer, the asset classes, the valuation methodology, or the circumstances in which a registered valuer is required. Nothing earlier on this page is affected by it.
Five questions to settle before anybody starts work
1. Which law requires this valuation?
Company law, exchange control, securities regulation, tax, insolvency, or an accounting standard. More than one may apply to the same transaction, and each answers the certifier question independently.
2. Who reads the report?
A registrar, an authorised dealer bank, a tax officer, an auditor, a tribunal, a counterparty. The reader determines what the report has to contain and how much of the working has to be visible.
3. Which asset class or classes?
If the subject spans shares and real estate and equipment, more than one registered valuer may be required. Establish this before the fee is agreed, not after.
4. What is the valuation date?
Prescribed in most statutory contexts and frequently not the date the work is done. Reports also carry shelf lives: some rules fix an outer limit on how old a report may be at the time of the transaction.
5. Is there an independence problem?
A valuer who has advised on the transaction, or who is connected to the company, is a problem under section 247 and under most of the SEBI requirements. This is worth checking at the point of appointment rather than at the point of challenge.
Where to go next
2. Valuation for Mergers, Acquisitions and Business Transfers
Share exchange ratios, business transfer pricing, open offer and delisting floor prices, and where control premium and marketability discount belong.
3. Valuation for Fundraising, Convertibles and ESOPs
Two separate pricing tests for a foreign-funded round, convertible instruments, the end of angel tax, employee stock options and sweat equity.
4. Valuation for Financial Reporting: Purchase Price Allocation, Fair Value and Impairment
Fair value and the three level hierarchy, purchase price allocation, contingent consideration, goodwill impairment and hard-to-value instruments.
5. Valuing Intangible Assets, Brands and Intellectual Property
Separating an intangible from goodwill, the four methods that do most of the work, and the settings outside an acquisition where the question arises.
Valuation Services
Back to the main page: which valuation you need, who can sign it, and how an engagement is put together.
Send an enquiry
If you are not sure which of the regimes above applies to what you are doing, that is the normal starting point and it is a short conversation. Tell us the transaction and who has asked you for a valuation. A partner replies within one business day.
This page is general information, not professional advice. Company law, exchange control, securities regulation, tax law and the accounting standards that sit behind a valuation all change frequently, and several of them changed materially in 2025 and 2026. How any of it applies depends on your own facts. Take professional advice before acting on anything on this page. We are happy to be that adviser, but we do not act on a web page, ours or anyone else's, without one.