Valuation
Short answer
A Registered Valuer is an individual or entity registered with the Insolvency and Bankruptcy Board of India (IBBI) and authorised to issue valuation reports required under the Companies Act, 2013. You need one for preferential allotments, share swaps in mergers, certain related-party transactions and valuations under the IBC. A report from an unregistered professional does not satisfy those requirements, however competent the analysis.
What the registration actually is
Under Section 247 of the Companies Act, 2013 and the Companies (Registered Valuers and Valuation) Rules, 2017, valuations required by the Act must be performed by a person registered with the IBBI as a Registered Valuer. Registration is by asset class — securities or financial assets, land and building, plant and machinery — and a valuer may only value the class they are registered for.
When you need one
The requirement is transaction-driven rather than size-driven, so small companies hit it as often as large ones:
- Preferential allotment of shares under Section 62(1)(c) — the standard route for a priced funding round.
- Share swap ratios in a scheme of merger, demerger or amalgamation.
- Valuation of assets in a scheme of arrangement placed before the NCLT.
- Valuations required in insolvency proceedings under the IBC.
- Certain related-party transactions and buy-backs, depending on the structure.
Registered Valuer or Merchant Banker — which do you need?
This confuses almost everyone, and using the wrong one is a real and common error. They come from different statutes, so the answer depends on which law is asking.
The Companies Act asks for a Registered Valuer. Certain income-tax provisions — notably the Rule 11UA DCF route, and ESOP perquisite valuation — ask for a Merchant Banker report. A single funding round can require both, valuing the same shares on the same date under different rules.
The practical consequence: if the two exercises are commissioned separately, they can produce two different numbers for one transaction, which is precisely the inconsistency a diligence team looks for.
What a usable report contains
A valuation report that survives scrutiny states the purpose and the statute it is issued under, the valuation date, the methodology and why it was chosen, the assumptions and their sources, and the valuer's registration number. Projections used in a DCF should reconcile with the company's own board-approved plan.
If the report's projections contradict the pitch deck sitting in the same data room, the report is worse than useless — it becomes evidence.
This article is general information, current at the date shown, and is not advice on your specific facts. Tax and corporate law change, and thresholds and deadlines are amended regularly — check the position before you act on it, or ask us.
Where we help
Valuation Advisory
DCF, Rule 11UA, Registered Valuer and merchant-banker reports — one defensible number across Income Tax, Companies Act and FEMA.
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