Types of Valuers and their respective authority for Valuation Services

Type of Valuer

Primary Services

IBBI Registered Valuer (RV) [Securities or Financial Assets class]

Companies Act Sec 247 (share issuance, mergers, minority buyout, non-cash transactions, sweat equity, compromise with creditors) | IBC/CIRP Liquidation | Slump Sale Rule 11UAB | NAV-method IT valuation | AIF valuation | PPA / Ind AS | ESOP accounting

SEBI Registered Category-I Merchant Banker (MB)

FDI / FEMA inbound share valuation | ESOP perquisite (Income Tax) | DCF-method IT valuation (Rule 11UA) | SEBI open offer / takeover / fairness opinion | Non-cash promoter transactions | Preferential issue floor price | ODI > USD 5 million or share swap

Chartered Accountant (CA) [ICAI member in practice]

NAV-method IT valuation (Rule 11UA) | FEMA FDI valuation (unlisted, non-DCF) | SEBI open offer / non-cash promoter (with 10 yrs experience) | ODI valuation < USD 5 million | Diminution in ODI value certification

Practicing Cost Accountant (CMA / CoA — ICAI-CMA member)

FEMA valuation for FDI / share transfer (RBI NDI Rules) — explicitly permitted alongside CA and MB under RBI pricing guidelines

Certified Public Accountant (CPA) [Host country CPA — e.g., US CPA]

FEMA ODI: (a) Valuation of foreign company for ODI < USD 5 million [alongside CA] per RBI FEMA 19 ODI forms | (b) Certifying diminution in value of overseas investment under FEM (Overseas Investment) Rules, 2022 — Rule 18

Investment Banker / Merchant Banker [Registered in host country]

FEMA ODI: Valuation for ODI > USD 5 million or share swap transactions — must be registered with the appropriate regulatory authority in the host country

BSE / NSE Enrolled Independent Valuer

SEBI: Exit opportunity valuation for listed company shareholders (delisting / buyback) — must be enrolled with BSE or NSE

#

Valuation Service / Purpose

Governing Law / Section

Person(s) Eligible to Conduct Valuation

Key Notes

1

Further Issue of Shares (Preferential Allotment)

Companies Act 2013 Sec 62(1)(c)

IBBI Registered Valuer (SFA Class)

CA or MB alone not valid unless IBBI-registered. Report required before allotment.

2

Mergers, Amalgamations & Demergers (Swap Ratio)

Companies Act 2013 Sec 230–232

IBBI Registered Valuer (SFA Class)

NCLT submission requires registered valuer report; Fairness Opinion also needed (SEBI LODR for listed).

3

Minority Stake Buyout / Exit Pricing

Companies Act 2013 Sec 236

IBBI Registered Valuer (SFA Class)

Exit price for minority shareholders must be certified by registered valuer.

4

Non-Cash Asset Transactions with Directors

Companies Act 2013 Sec 192

IBBI Registered Valuer (SFA Class)

Prevents conflict of interest in director–company non-cash asset swaps.

5

Compromise / Arrangement with Creditors & Members

Companies Act 2013 Sec 230

IBBI Registered Valuer (SFA Class)

Accompanies restructuring scheme filed with NCLT.

6

Sweat Equity Issuance

Companies Act 2013 Sec 54

IBBI Registered Valuer (SFA Class)

For valuing IP / know-how contributed by employees or directors.

7

Company Administrator Authority / Liquidation

Companies Act 2013 Sec 260 &

281

IBBI Registered Valuer (SFA Class)

Covers administrator-led valuation and court-supervised liquidation proceedings.

8

Related Party Transaction (RPT) Valuation

Companies Act 2013 Sec 188

IBBI Registered Valuer (SFA Class)

Arm's length pricing; registered valuer report required before board

/ member approval.

9

ESOP Valuation — Accounting (Compensation Expense)

Ind AS 102 / AS 102

(Share-Based Payments)

IBBI Registered Valuer OR SEBI Cat-I Merchant Banker

For recording ESOP compensation expense in books. Both professionals accepted.

10

ESOP Valuation — Income Tax (Perquisite at Exercise)

Income Tax Act Rule 3(8)(iii)

SEBI Registered Category-I Merchant Banker

Statutory requirement; IBBI RV alone is not sufficient for income tax perquisite purposes.

11

ESOP Valuation — Listed Companies (SEBI)

SEBI (SBEB & Sweat Equity) Regulations

IBBI Registered Valuer (preferred) / SEBI MB

For determining exercise price and accounting cost; SEBI ICDR floor price formula applies additionally.

12

Share Valuation — FMV DCF Method (Rule 11UA)

Income Tax Act 1961 Rule 11UA

SEBI Registered Category-I Merchant Banker

Mandatory MB sign-off for DCF method. CA or RV alone not sufficient for DCF under Rule 11UA.

13

Share Valuation — FMV NAV Method (Rule 11UA)

Income Tax Act 1961 Rule 11UA

IBBI Registered Valuer OR Chartered Accountant (CA)

Standard for asset-heavy companies; no Merchant Banker requirement for NAV method.

14

Slump Sale / Business Transfer Valuation

Income Tax Act 1961 Rule 11UAB

IBBI Registered Valuer

Mandatory for transfer of business undertakings; determines FMV for tax computation.

15

Capital Gains — FMV / Cost of Acquisition

Income Tax Act Sec 50CA & 56(2)(x)

IBBI RV or CA (NAV method) SEBI MB

(DCF method)

Protects buyer (deemed income under 56(2)(x)) and seller (inflated gains under 50CA).

16

Intangible Asset Valuation (Brands, Patents, Goodwill)

Income Tax Act / Ind AS 38 / Ind AS 103

IBBI Registered Valuer

For tax compliance, M&A; Purchase Price Allocation, and financial reporting purposes.

17

ESOP Perquisite — Share Value at Exercise

Income Tax Act Rule 3(8)(iii)

SEBI Registered Category-I Merchant Banker

TDS computation on perquisite requires MB-certified FMV on date of exercise.

18

FDI — Inbound Share Issuance (FC-GPR Filing)

FEMA NDI Rules 2019 RBI

Pricing Guidelines

SEBI Cat-I Merchant Banker OR Chartered Accountant (CA) OR Practicing Cost Accountant

RBI mandates internationally accepted methodology (DCF preferred). All 3 professionals permitted per RBI NDI Rules 2019.

19

FDI — Share Transfer Resident to Non-Resident (FC-TRS)

FEMA NDI Rules 2019 RBI

Guidelines

SEBI Cat-I Merchant Banker OR Chartered Accountant (CA) OR Practicing Cost Accountant

AD Banks increasingly also prefer reports backed by IBBI Registered Valuers for enhanced credibility.

20

ODI — Overseas Direct Investment

< USD 5 Million

FEMA 19 / FEM (OI) Rules 2022

Chartered Accountant (CA) OR Certified Public Accountant (CPA — host country)

Explicitly permitted per RBI FEMA 19 ODI forms: 'Chartered Accountant or a Certified Public Accountant.'

21

ODI — Overseas Direct Investment

> USD 5 Million or Share Swap

FEMA 19 / FEM (OI) Rules 2022

SEBI Cat-I Merchant Banker OR Investment Banker / MB Registered in Host Country

Host-country Investment Banker must be registered with the appropriate regulatory authority in that jurisdiction.

22

ODI — Diminution in Value of Overseas Investment (Rule 18)

FEM (Overseas Investment) Rules 2022, Rule 18

IBBI Registered Valuer OR Valuer Registered in Host Country OR CPA (Host Jurisdiction)

Applies when ODI > USD 10 million OR diminution > 20% of outstanding dues. CPA explicitly named in Rule 18 proviso.

23

CCPS / CCD Valuation for Foreign Investors

FEMA NDI Rules 2019 (Equity Classification)

SEBI Cat-I Merchant Banker OR CA / Cost Accountant

CCPS/CCD treated as equity from issuance date under FEMA; incorrect valuation triggers RBI non-compliance.

24

Preferential Issue — Floor Price (Listed Companies)

SEBI (ICDR) Regulations 2018

IBBI Registered Valuer (intrinsic value opinion)

Floor price formula-driven (VW AP 90/10 day); Registered Valuer provides independent intrinsic value opinion.

25

Exit Opportunity to Shareholders (Delisting / Buyback)

SEBI Regulations (Delisting / Buyback)

Independent Valuer enrolled with BSE or NSE

Must be enrolled with stock exchange; not a general requirement — specifically exchange-enrolled independent valuer.

26

Business Assets Issued to Promoters (Non-Cash Consideration)

SEBI Regulations

Merchant Banker (MB) OR Chartered Accountant (CA)

Both permitted; minimum 10 years' experience required for open offer

/ takeover valuation.

27

Open Offer / Takeover Pricing (Fairness Opinion)

SEBI (SAST) Regulations SEBI (LODR) Regulations

Merchant Banker (MB) OR CA with min 10 yrs experience

Must accompany NCLT / exchange filings; protects directors from shareholder litigation.

28

AIF / PE Fund Portfolio Valuation

SEBI AIF Regulations

IBBI Registered Valuer

For periodic NAV computation and reporting to investors under SEBI AIF framework.

29

CIRP — Corporate Insolvency Resolution Process

IBC 2016, Reg 27 & 35 (IBBI

CIRP Regulations)

IBBI Registered Valuer (Two independent RVs)

Two independent registered valuers mandatory; average of both values used. No other professional accepted.

30

Liquidation Valuation

IBC 2016 (Liquidation Process Regs)

IBBI Registered Valuer

Covers all three asset classes: Land & Building, Plant & Machinery, Securities / Financial Assets.

31

Voluntary Liquidation

IBBI (Voluntary Liquidation Process) Regulations 2017

IBBI Registered Valuer

Same three-asset-class requirement; IBBI RV mandatory throughout.

32

Fast Track CIRP

IBBI (Fast Track CIRP) Regulations 2017

IBBI Registered Valuer

Applies to smaller companies / start-ups under fast-track insolvency proceedings.

33

Purchase Price Allocation (PPA) Post M&A; / Business Combination

Ind AS 103 / IFRS 3

IBBI Registered Valuer

Allocation of acquisition cost to identifiable assets (goodwill, customer lists, brands etc.) post-acquisition.

34

Impairment Assessment — Goodwill / Investments

Ind AS 36 / IAS 36

IBBI Registered Valuer

Annual or trigger-based impairment testing; recoverable amount determination required.

35

Investment Property Valuation

Ind AS 40 / IAS 40

IBBI Registered Valuer

For fair value measurement of investment properties held for rental / capital appreciation.

36

Financial Instruments — Fair Value Measurement

Ind AS 109 / Ind AS 113

IBBI Registered Valuer

Covers complex debt/equity instruments; fair value hierarchy (Level 1, 2, 3) compliance required.

37

409A Valuation (US-facing Indian Startups)

US IRC Section 409A

Independent Qualified Appraiser (IRS-compliant; typically CA / RV with relevant expertise)

Required for US stock option pricing compliance; not an Indian regulatory category but applicable for India-US structures.

38

Transfer Pricing Valuation (Cross-Border Related Party)

Income Tax Act, Sec 92 (Transfer Pricing Rules)

CA / RV / Certified Transfer Pricing Specialist

Arm's length price determination for cross-border related party transactions; TP documentation mandatory.