COMPANIES ACT MASTER SERIES - CHAPTER 17
Registered Valuers
A complete valuation-governance guide covering section 247, the Companies (Registered Valuers and Valuation) Rules, 2017, asset-class eligibility, registration, appointment, independence, report architecture, RVO oversight, discipline, valuation methods and the 2026 IBC valuation overlay.
Section 247Rules 1-213 asset classesCode of Conduct
Chapter architecture
Valuation is a governed opinion, not a negotiated number
Statutory trigger
Section 247 applies when the Companies Act or its rules require valuation of an asset, liability, security, net worth or goodwill.
Qualified professional
The person must be registered for the relevant asset class and be a valuer member of a recognised RVO.
Independent appointment
The audit committee appoints the valuer; if none exists, the Board appoints.
Method and evidence
The conclusion must follow accepted standards, reliable data, transparent assumptions and documented professional judgment.
Accountability
The signing valuer retains responsibility even when another valuer or expert supplies an input.
Regulatory oversight
IBBI acts as the Authority; RVOs function as front-line regulators for education, monitoring and discipline.
Core idea: valuation is not the same as price. Price is the amount agreed or observed in a transaction; value is a reasoned estimate under a defined basis, date, premise, purpose and set of assumptions.
Bare Act + simple decode
Section 247 - operative statutory framework
What activates section 247?
A Companies Act provision or a rule made under it must require valuation. A voluntary commercial valuation is not automatically governed by section 247 merely because a company is involved.
A Companies Act provision or a rule made under it must require valuation. A voluntary commercial valuation is not automatically governed by section 247 merely because a company is involved.
Who appoints?
The audit committee where one exists; otherwise the Board. Management may coordinate data and scope, but should not replace the statutory appointing authority.
The audit committee where one exists; otherwise the Board. Management may coordinate data and scope, but should not replace the statutory appointing authority.
Example: A private company makes a preferential allotment under section 62(1)(c). The issue price must be supported by the valuation report required under the applicable statutory framework.
Control: Board and audit committee minutes should record statutory purpose, asset class, independence review, scope, valuation date, fee basis and authority to issue the report.
Scope gate
When the Valuation Rules apply - and when they do not
| Question | Correct position | Practical control |
|---|---|---|
| Is valuation required under the Companies Act or its rules? | Section 247 and the Valuation Rules apply. | Identify the exact section/rule in the engagement letter and report. |
| Is valuation required only under another law? | The Valuation Rules do not apply merely because they exist, unless that other law or regulator adopts them or requires an IBBI-registered valuer. | Map every legal basis separately: tax, FEMA, SEBI, IBC, banking or contractual. |
| Is the assignment voluntary? | Parties may still appoint a registered valuer, but statutory section 247 consequences depend on the governing mandate. | Do not mislabel a voluntary opinion as a statutory valuation. |
| Does the assignment cover multiple asset classes? | Use valuers registered for each relevant class, or obtain disclosed inputs from another registered valuer. | Define lead responsibility and cross-asset reconciliation. |
| Is the report later used for another purpose? | A value prepared for one purpose may be unsuitable for another. | Restrict intended use and obtain an updated or purpose-specific report. |
Common error: using a merchant banker, chartered accountant, engineer or consultant solely by professional title without checking whether the assignment legally requires registration for the relevant asset class.
Appointment governance
Audit committee, Board and management responsibilities
Audit committee
Where constituted, it is the statutory appointing authority. It should independently evaluate scope, competence, conflict and fee terms.
Board
Acts where no audit committee exists. The Board should not delegate the legal appointment itself without proper authority.
Management
Provides records, access, forecasts and explanations, but should not dictate methodology, assumptions or conclusion.
Company secretary
Maps statutory trigger, prepares agenda/minutes, checks registration and tracks disclosures and filings.
CFO / finance team
Reconciles source data, explains projections, debt, working capital, tax and contingent liabilities.
Valuer
Defines scope, confirms independence, challenges information, selects methods and signs the conclusion.
Trigger memo: identify law, purpose, asset class and intended users.
Eligibility check: verify registration, RVO membership and active status.
Conflict clearance: map direct and indirect interest for the six-year statutory window.
Appointment: approve engagement terms, fee, valuation date and deliverables.
Data room: establish source ownership, cut-off and change-control protocol.
Review: test process and assumptions without negotiating the answer.
Independence
The three-year look-back and three-year post-valuation restriction
| Risk | Why it matters | Required response |
|---|---|---|
| Equity or debt interest in subject company | Direct financial interest can bias the conclusion. | Decline the assignment; disposal shortly before appointment may still fall within look-back. |
| Interest through relative, associate or controlled entity | Indirect interest is also prohibited. | Map beneficial ownership, close relationships and economic exposure. |
| Success fee or value-linked fee | Creates incentive to reach a target value. | Use transparent fixed/time-based or otherwise independent fee terms. |
| Prior advocacy or transaction role | May create self-review or alignment threat. | Assess whether independence is impaired; disclose prior unconnected engagement where required. |
| Gifts, hospitality or commercial dependence | Can create undue influence. | Reject benefits and document safeguards. |
| Becoming interested after report | Section 247 extends restriction for three years after valuation. | Maintain a post-assignment conflict register and pre-clear later engagements/investments. |
Interpretation discipline: the statutory prohibition is not cured merely by disclosure. If there is a prohibited direct or indirect interest, the valuer should not accept or continue the assignment.
Liability
Penalty, fraud, refund and compensation
| Provision | Consequence | Who may be affected |
|---|---|---|
| Section 247(3) - ordinary contravention | Penalty of Rs. 50,000. | Registered valuer. |
| Section 247(3) - intent to defraud | Imprisonment up to one year and fine from Rs. 1 lakh to Rs. 5 lakh. | Valuer; criminal process and proof of intent required. |
| Section 247(4) | Refund remuneration and pay damages for loss from incorrect or misleading statements after conviction. | Company and any other person who suffered qualifying loss. |
| Rule 20 read with section 469(3) | Contravention of the Rules may attract the general punishment specified by the Act. | Any person in breach. |
| Rule 21 read with section 448 | Knowing false statement or knowing omission of material fact attracts false-statement liability. | Person making the report, certificate or document. |
| Rule 17 | Warning, suspension, cancellation or governance change through disciplinary order. | Valuer, RVE or RVO. |
Not only the final number: liability can arise from misleading scope, selective data, omitted conflict, unsupported assumptions, false inspection claims, hidden restrictions, model error or an unjustified disclaimer.
Rules 1-2
Application and core definitions
Authority
The authority specified under section 458. IBBI performs this role for the registered valuer framework.
Asset class
A distinct group of assets displaying similar characteristics and requiring a separate set of valuers.
Registered valuer
A person registered with the Authority in accordance with the Rules.
RVO
A registered valuers organisation recognised under rule 13.
Partnership entity
A registered partnership firm or LLP.
Valuation standards
Standards referred to in rule 18; pending general Central Government notification, rule 8 permits internationally accepted standards or RVO-adopted standards.
Scope clarification: the Rules apply to valuations under the Companies Act or the Rules. Valuation conducted under another law is not affected merely by commencement of these Rules.
Rule 3 - individuals
Eligibility for registration
| Eligibility gate | Rule position | Evidence |
|---|---|---|
| RVO status | Must be a valuer member of an RVO and recommended by that RVO. | Membership, certificate of practice and recommendation. |
| Examination | Must have passed the valuation examination within three years before application. | IBBI examination result. |
| Qualification and experience | Must satisfy rule 4 and Annexure IV for the asset class. | Degrees, professional membership and experience certificates. |
| Capacity | Not a minor, not of unsound mind, not an undischarged bankrupt and not seeking bankruptcy. | Declarations and checks. |
| Residence | Must be resident in India under the FEMA-linked meaning applicable to an individual. | Residence evidence. |
| Conviction filter | Specified conviction and sentence-based disqualifications apply. | Court and self-declaration checks. |
| Income-tax valuer penalty | Section 271J penalty can trigger a five-year ineligibility window after finality. | Tax order and appeal status. |
| Fit and proper | Integrity, reputation, character, absence of convictions/restraints, competence and solvency are relevant. | Regulatory, financial and professional record. |
Rule 3 - entities
Registered Valuer Entity eligibility
| Condition | Practical meaning |
|---|---|
| Permitted objects | Entity must be established for professional or financial services including valuation services. |
| Solvency | It must not be under insolvency resolution or be an undischarged bankrupt. |
| Partner/director eligibility | All partners or directors must satisfy specified personal eligibility conditions. |
| Minimum registered valuers | Three or all partners/directors, whichever is lower, must be registered valuers. |
| Relevant asset class | At least one partner/director must be registered for each asset class sought. |
| RVO membership | The entity must be a member of one RVO at a time. |
| Signing authority | Only a partner/director registered for the relevant asset class may sign and act for the entity. |
| Liability | Entity and signing partner/director are liable in the manner specified by rule 7. |
Example: An RVE has five directors, but only two are registered valuers. It fails the requirement that three or all directors, whichever is lower, must be registered valuers.
Rule 4 + Annexure IV
Qualifications, experience and three asset classes
| Asset class | Indicative qualifying route | Experience |
|---|---|---|
| Land and Building | Graduate in civil engineering, architecture, town planning or equivalent; or relevant post-graduate route including prescribed valuation/real-estate valuation qualification. | Generally five years after graduate route or three years after qualifying post-graduate route. |
| Plant and Machinery | Graduate in specified engineering/technical disciplines or valuation of plant and machinery; or relevant post-graduate route. | Generally five years after graduate route or three years after post-graduate route. |
| Securities or Financial Assets | CA, CS or CMA membership; MBA/PGDBM with finance specialisation; or post-graduate in finance. | Three years in the specified discipline. |
| Any other asset class | As may be specified by the Central Government with corresponding qualification and experience. | As specified. |
Experience rule: experience should be in the specified discipline and counted after the qualifying credential where the rule requires post-qualification experience. Generic work tenure is not automatically relevant valuation experience.
Rules 5-6
Education, examination and registration workflow
| Stage | Rule control | Timeline / fee |
|---|---|---|
| RVO educational course | Completed by eligible individual before examination. | RVO syllabus and practical training. |
| Valuation examination | Tests knowledge, skills, values and ethics; unlimited attempts. | Syllabus/format/frequency published at least three months in advance. |
| Individual application | Form A with documents and RVO verification. | Non-refundable Rs. 5,000. |
| Entity application | Form B. | Non-refundable Rs. 10,000. |
| Deficiency / clarification | Authority may permit or require response. | Typically 21 days. |
| Grant | Certificate in Form C for relevant asset class. | Within 60 days excluding applicant response time, if satisfied. |
| Prima facie rejection | Reasons communicated; applicant may explain. | 45 days for communication; 15 days for explanation; decision within 30 days thereafter. |
Rules 7, 7A and 9
Conditions, change control and temporary surrender
Continuous eligibility
Registration is not a one-time entitlement. Qualification, experience and fit-and-proper conditions must remain satisfied.
Asset-class boundary
A valuer must not conduct a registered valuation outside the class for which registration is granted.
RVO transfer
Prior Authority permission is required to shift membership from one RVO to another.
Grievance control
Adequate grievance-redress arrangements are mandatory.
Records
Each assignment record must be retained for at least three years, subject to longer contractual, litigation or regulatory requirements.
Change intimation
Personal, partner/director, partnership agreement or memorandum changes affecting registration must be intimated with prescribed fee.
Temporary surrender
Permitted under RVO bye-laws; Authority and public RVO records must be updated.
Entity changes
Removal of a registered valuer partner/director must be immediately reported with reasons.
Rule 8
Conduct of valuation and retained responsibility
| Requirement | Meaning for the report |
|---|---|
| Applicable standards | Use Central Government-notified valuation standards; until then, internationally accepted standards or standards adopted by an RVO. |
| Other valuer input | A valuer may obtain input or a separate valuation for another asset class from another registered valuer. |
| Full disclosure | Identify the other valuer, asset class, scope and input in the report. |
| Retained liability | The first-mentioned valuer remains responsible for the resultant valuation, regardless of the nature of external input. |
| Caveats | Explain actual limitations; do not use disclaimers to escape professional responsibility. |
| Conclusion | State the value together with basis, rationale, methods, assumptions, sensitivity and reconciliation. |
Multi-asset example: A securities valuer values the enterprise and uses separate land/building and plant/machinery reports. The securities valuer must disclose those inputs, assess consistency and cannot blindly add the numbers without reconciling debt, working capital, surplus assets, tax and double counting.
Rule 8(3)
Mandatory minimum content of a valuation report
| No. | Required element | Quality question |
|---|---|---|
| 1 | Background information | Is the legal/economic interest being valued correctly described? |
| 2 | Purpose and appointing authority | Does the report identify the statutory trigger and intended use? |
| 3 | Valuer and experts | Are registration, asset class, role and responsibility clear? |
| 4 | Interest or conflict | Is independence explicitly addressed? |
| 5 | Appointment, valuation and report dates | Are the three dates distinct and internally consistent? |
| 6 | Inspection/investigation | What was physically or analytically verified? |
| 7 | Information sources | Who owns each input and how was reliability assessed? |
| 8 | Procedure and standards | Are approaches, methods, models and standards explained? |
| 9 | Restrictions on use | Are intended users and permitted purpose clear? |
| 10 | Major factors | Are material drivers, risks and sensitivities visible? |
| 11 | Conclusion | Is the value tied to basis, premise, currency and date? |
| 12 | Caveats and limitations | Do they explain limitations without disclaiming responsibility? |
Board review principle: challenge completeness, consistency and process. The Board should not pressure the valuer to reach a desired issue price, swap ratio or transaction value.
Rules 12-14A
Registered Valuers Organisations as front-line regulators
| RVO duty | Practical output |
|---|---|
| Education and practical training | Asset-class curriculum and educational course. |
| Membership / certificate of practice | Admission only of persons meeting qualification and experience criteria. |
| Code of Conduct | Rules at least as strict as Annexure I. |
| Continuing education | Ongoing competence and current technical knowledge. |
| Monitoring and quality review | Review of assignments, service quality and member conduct. |
| Grievance and discipline | Complaint handling, disciplinary committee and appeal panel under bye-laws. |
| Public register | Searchable status of valuer members and disciplinary action. |
| Reporting to Authority | Information and reports required by IBBI. |
| Governance changes | Intimation of governing board, committees, appellate panel and other prescribed changes with fee. |
Institutional model: IBBI is the Authority and RVOs provide first-line education, monitoring and disciplinary infrastructure. Registration and RVO membership are both material status checks.
Rules 15-17
Complaint, show-cause and disciplinary lifecycle
| Stage | Control |
|---|---|
| Complaint | May be filed with the Authority with non-refundable fee of Rs. 1,000; certain complaints may be referred to the relevant RVO. |
| Source of action | Inspection, investigation, complaint or material otherwise on record. |
| Show-cause notice | Must identify legal provisions, alleged facts, evidence, proposed action and response process. |
| Natural justice | Authorised officer disposes of the matter by a reasoned order. |
| Possible outcome | No action, warning, suspension, cancellation or change in partner/director/RVO governing board. |
| Publication | Order is issued to the person and published on the Authority website. |
| Effective date | Normally after 30 days unless the order states otherwise. |
| Appeal | Aggrieved person may appeal before the Authority. |
Rules 18-21
Standards committee, general contravention and false statements
Rule 18
Central Government may notify and modify valuation standards on Committee recommendation.
Rule 19
Multi-stakeholder Committee advises on valuation standards and policies; tenure is three years, maximum two terms.
Interim standards route
Until general standards are notified under rule 18, rule 8 permits internationally accepted standards or RVO-adopted standards.
Rule 20
Contravention of the Rules is punishable through section 469(3), without prejudice to other liability.
Rule 21
Knowing material falsehood or knowing omission in a required report or certificate attracts section 448.
Multiple regimes
The same conduct may trigger section 247, disciplinary action, contractual damages, securities/tax/IBC consequences and professional-body action.
Current distinction: IBBI notified IVS on 1 April 2026 specifically for valuations under the IBC. That circular does not by itself constitute the Central Government notification of general Companies Act valuation standards under rule 18.
Annexure I
Model Code of Conduct - the 10 control families
| Control family | Non-negotiable requirements |
|---|---|
| Integrity and fairness | Honesty, adequate information, no misrepresentation, public interest and no conduct bringing disrepute. |
| Competence and due care | Independent judgment, current skills, applicable standards and clear use of other experts. |
| Objectivity and independence | No bias, coercion, undue influence or impaired association. |
| Securities dealing | Do not trade in subject-company securities after awareness of possible association, subject to insider-trading rules and report-publication timing. |
| No convenience valuation | No mandate snatching, target-value opinion or client-driven conclusion. |
| No success fee | Independent valuer must not charge a success fee. |
| Prior association disclosure | In fairness/independent expert opinions, disclose specified prior unconnected engagement during the preceding five years. |
| Confidentiality | Use or disclose confidential information only with authority or legal/professional duty. |
| Contemporaneous records | Document decisions, reasons, information, evidence and professional judgment. |
| Gifts, fees and workload | No compromising gifts; transparent written fee; reasonable workload; no profession-discrediting business. |
Statutory trigger map
Where Companies Act valuations commonly arise
| Provision / framework | Typical valuation | Key issue |
|---|---|---|
| Section 62(1)(c) + Share Capital Rules | Preferential issue price, including non-cash consideration. | Correct basis, valuation date, share rights and transaction terms. |
| Section 192 | Assets involved in non-cash transactions with directors or connected persons. | Value of asset and conflict-sensitive approval disclosure. |
| Sections 230-232 + CAA Rules | Shares, property, assets, swap/entitlement ratio and restructuring consideration. | Class fairness, methodology, relative valuation and accounting consistency. |
| Section 230 corporate debt restructuring | Shares and all tangible/intangible, movable/immovable assets. | Liquidity, creditor treatment and post-restructuring viability. |
| Section 236 | Minority share purchase after 90% threshold. | Prescribed fair value and equal treatment. |
| Section 281 | Asset valuation for Company Liquidator report. | Location, condition, encumbrance and realisable value. |
| Schedule III disclosures | Fair value/revaluation of investment property, PPE/ROU and intangible assets. | Whether disclosure valuation is based on a registered valuer. |
| IBC processes | Fair value, liquidation value and other prescribed valuations. | IBC regulations, IVS, VRIN and June 2026 report formats. |
This is a high-value compliance map, not an exhaustive list. The exact section, rule, notification, SEBI/FEMA/tax/IBC overlay and transaction facts must be checked for each assignment.
Preferential issue price floor - unlisted company: Under Rule 13(2)(a) of the Companies (Share Capital and Debentures) Rules, the price of shares or other securities issued by an unlisted company on a preferential basis cannot be lower than the price determined from a registered valuer's report. Listed issuers apply the applicable SEBI pricing framework; do not mechanically transplant the unlisted-company rule to the listed route.
Concept framework
Valuation date, report date, basis and premise
| Concept | Meaning | Failure risk |
|---|---|---|
| Valuation date | Date at which value is estimated. Facts known or knowable at that date drive the opinion. | Using later events without explaining hindsight or adjusting premise. |
| Report date | Date the report is issued. | Confusing report date with valuation date. |
| Basis of value | Definition of value, such as market value, fair value or another statutory basis. | Mixing bases across methods or reports. |
| Premise of value | Assumed use or circumstances, such as highest and best use, current use, orderly liquidation or forced sale. | Applying going-concern cash flows to a non-operating asset without support. |
| Unit of account | The asset, liability, security, business or interest being valued. | Valuing enterprise value when equity value is required. |
| Intended use/user | Why the valuation exists and who may rely on it. | Report used for tax, litigation or transaction purpose outside original scope. |
| Currency | Currency in which value is expressed. | Inconsistent exchange rates or country risk. |
| Special assumptions | Assumptions differing from existing facts but required for scenario valuation. | Hidden hypothetical conditions presented as fact. |
Valuation methods
Market, income and cost approaches
| Approach | Common methods | Best suited for | Core challenge |
|---|---|---|---|
| Market | Comparable-company multiples, precedent transactions, market price, comparable property/sales. | Active markets and comparable assets/businesses. | True comparability, adjustments, liquidity and control. |
| Income | DCF, dividend discount, capitalisation of earnings, multi-period excess earnings. | Income-producing businesses/assets with forecast visibility. | Forecast bias, discount rate, terminal value and cash-flow consistency. |
| Cost | Replacement cost, reproduction cost, depreciated replacement cost, adjusted net assets. | Specialised assets, early-stage/non-income assets and asset-heavy entities. | Obsolescence, economic life, installation and indirect costs. |
| Option / contingent claim | Black-Scholes, binomial or scenario-weighted models. | Options, convertibles, warrants and contingent rights. | Volatility, dilution, path dependency and contractual terms. |
Reconciliation example: DCF gives equity value of Rs. 520 crore, market multiples Rs. 490 crore and adjusted net assets Rs. 360 crore. The valuer should not simply average them. Weighting must reflect relevance, quality of inputs, business model and purpose.
Asset-class playbook
Different assets require different evidence
| Asset class | Critical diligence | Typical methods | Frequent red flags |
|---|---|---|---|
| Land and Building | Title, permitted use, encumbrance, access, FAR/FSI, leases, occupancy, physical inspection and market evidence. | Sales comparison, income capitalisation, residual/development, depreciated replacement cost. | Portal asking prices treated as transactions; no title/use analysis; no site inspection. |
| Plant and Machinery | Asset register, make/model, capacity, condition, location, maintenance, remaining life, removability and obsolescence. | Market comparison, depreciated replacement cost, income where separable. | Desktop valuation despite access; ignored dismantling/installation; double-counted spares. |
| Securities/Financial Assets | Rights, cap table, debt, forecasts, market data, tax, options, preference terms and related-party balances. | DCF, market multiples, transactions, NAV, option pricing. | Enterprise/equity mismatch; stale cap table; untested forecast; ignored liquidation preference. |
| Intangibles / goodwill | Legal ownership, useful life, obsolescence, contributory assets, customer attrition and royalty economics. | Relief-from-royalty, MPEEM, with-and-without, cost. | Valuing brand and goodwill twice; unsupported royalty/attrition rates. |
Data and working papers
A defensible value requires a defensible evidence trail
Source register
Identify document, owner, period, date received, version and reliability assessment.
Forecast bridge
Reconcile forecast to historical results, approved budget, capacity and market drivers.
Model controls
Independent formula check, units, signs, tax, debt, dilution, circular references and sensitivity.
Site evidence
Photographs, geolocation where appropriate, inspection notes, serial numbers and condition.
Market evidence
Transaction date, terms, source, arm’s-length status, adjustments and outlier treatment.
Legal inputs
Title, restrictions, litigation, contracts and expert opinions; disclose reliance and unresolved limits.
Judgment log
Why a method/input was selected, rejected or weighted.
Change log
Record every material data/model change after draft circulation and its value impact.
Management representation
Useful but not a substitute for professional skepticism or independent verification.
Minimum retention: rule 7 requires assignment records for at least three years; the Code of Conduct requires proper working papers for three years or longer under contract, regulatory requirement or pending Tribunal/Appellate Tribunal proceedings.
2026 IBC overlay
New standards and report formats - scope must be kept separate
| Date | IBC development | Effect |
|---|---|---|
| 12 August 2024 | VRIN introduced for each valuation report under the IBC. | Unique report reference generated before submission; not a general Companies Act VRIN mandate. |
| 1 April 2026 | IBBI notified International Valuation Standards, as updated from time to time, for valuations under the IBC. | IVS applies to IBC valuations from that date. |
| 15 June 2026 | IBBI issued detailed Guidelines for Conducting Valuation under the IBC. | Mandatory documentation, minimum content, asset-specific formats and coordinating-valuer guidance for subsequent IBC valuations. |
| 15 June 2026 | Report content includes registration, CoP status, VRIN, basis/premise, approaches, data, inspections, sustainability/functional factors, assumptions and rationale. | IBC reports require structured evidence and page-level VRIN presentation. |
Do not over-extend: the 2026 circulars expressly operate under the IBC and regulations made under it. For a Companies Act-only assignment, apply section 247, the Valuation Rules, applicable Companies Act rules and the relevant accepted/RVO standards.
Current ecosystem
IBBI/RVO framework at 31 March 2026
| Metric | Official position |
|---|---|
| Recognised RVOs | 14 |
| Active individual registered valuers | 6,108 |
| Land and Building | 3,134 |
| Plant and Machinery | 600 |
| Securities or Financial Assets | 2,374 |
| Individuals registered in all three classes | 5 |
| Individuals registered in two classes | 103 |
| Registered Valuer Entities | 133 |
| Cancelled individual registrations reported cumulatively | 16 |
6,108
active individual RV registrations
133
registered valuer entities
14
recognised RVOs
Counts are a point-in-time official IBBI snapshot and can change. Appointment teams should verify current live status on the Authority/RVO records.
Forms and fees
Registration and change-control reference
| Form / fee | Purpose |
|---|---|
| Form A | Individual application for registration. |
| Form B | Partnership entity/company application for registration. |
| Form C | Certificate of registration. |
| Form D | Application for recognition as RVO. |
| Form E | Certificate of RVO recognition. |
| Rs. 5,000 | Individual registration application fee. |
| Rs. 10,000 | Entity registration application fee. |
| Rs. 1 lakh | RVO recognition application fee. |
| Rs. 1,000 | Complaint fee before Authority. |
| Annexure V | Fees for changes to personal/entity/RVO details; taxes additional. |
Verification pack before appointment: registration certificate, asset class, RVO membership, certificate of practice/status, disciplinary status, partner/director signing authority, independence declaration and scope-specific competence.
Judicial principles
How courts and tribunals approach valuation disputes
| Principle | Practical lesson |
|---|---|
| Valuation is technical and complex | Courts ordinarily respect expert valuation where process, methods and data are rational. |
| No single universal method | Method depends on asset, purpose, facts, market and information quality. |
| Fairness is process-sensitive | Disclosure, independence, class treatment and consistency can matter as much as arithmetic. |
| Expert deference is not immunity | Intervention remains possible for fraud, conflict, manifest error, irrelevant considerations or material omission. |
| Share value is an economic interest | Capital cover/net worth, yield/earnings and marketability are recognised valuation considerations. |
| Commercial wisdom does not cure illegality | Stakeholder approval cannot validate prohibited conflict or statutory non-compliance. |
Miheer H. Mafatlal
Share valuation is a technical problem appropriately left to experts, while the court tests legality, class fairness, disclosure and whether the scheme is one a reasonable person may approve.
Hindustan Lever / later Supreme Court applications
Courts do not casually substitute their own valuation for an expert ratio, but may examine whether relevant factors and recognised methods were considered.
Practical cases
Eight real-world decision problems
Target issue price
Management asks the valuer to “support at least Rs. 120.” The valuer must reject target-driven framing and independently determine value.
Wrong asset class
A securities valuer signs a standalone land valuation. Registration for one class does not authorise another.
Related-party interest
Valuer’s controlled entity holds debt of the subject company. The indirect economic interest can disqualify the assignment.
External expert input
A land valuer supplies property value to the lead securities valuer. The lead must disclose and critically evaluate the input.
Forecast changed after draft
Management increases terminal growth after seeing a low draft. Change must be independently assessed and logged, not automatically accepted.
Minority squeeze-out
Section 236 value must be developed under the prescribed statutory framework, not simply the last internal transfer price.
No physical inspection
A plant is inaccessible. The report must explain limitation, alternative evidence and value impact; it must not falsely state inspection.
IBC reuse
A Companies Act report is reused in CIRP. It may fail IVS, VRIN and June 2026 IBC report-format requirements and needs a compliant assignment.
Exam and professional case studies
Apply the rule, identify the failure, design the control
| Case | Answer framework |
|---|---|
| Audit committee exists, but CFO appoints valuer by email. | Section 247 appointment should be made by audit committee. Ratification may not cure every process defect; make a proper appointment and assess work already performed. |
| Valuer sold subject-company shares two years before appointment. | Falls within the three-year look-back; do not accept. |
| RVE has three directors; only one is a registered valuer. | Fails the entity eligibility condition requiring three or all directors, whichever lower, to be registered valuers. |
| Valuer passed exam four years before application. | Rule 3 requires passing within three years preceding application; re-examination is required unless another valid route applies. |
| Report omits valuation date but states report date. | Rule 8(3) requires date of appointment, valuation date and report date; omission is material. |
| Lead valuer says land value is solely another valuer’s responsibility. | Rule 8 permits external input but retains liability for resultant valuation with the first-mentioned valuer. |
| Client offers fee equal to 1% of transaction value. | Success fee conflicts with the Model Code of Conduct for an independent valuer. |
| False title assumption knowingly hides litigation. | Potential section 247, rule 21/section 448, disciplinary, contractual and other statutory consequences. |
Company-side checklist
Before, during and after a statutory valuation
| Phase | Checklist |
|---|---|
| Before appointment | Exact legal trigger; audit committee/Board authority; correct asset class; live registration/RVO/CoP; conflict and disciplinary checks; no value-linked fee. |
| Engagement | Purpose; basis; premise; valuation date; intended users; assets/liabilities; standards; information responsibilities; inspections; experts; timeline; confidentiality; fee. |
| Data room | Cap table; audited/interim financials; debt; forecasts; contracts; tax; litigation; title; asset register; market data; management representation. |
| Draft review | Formula and data reconciliation; assumptions; sensitivity; enterprise-to-equity bridge; cross-asset consistency; rights and dilution; disclosures. |
| Approval/use | Do not edit valuer conclusion; place complete report before competent authority; use only for stated purpose; satisfy filing/disclosure rules. |
| Post-report | Maintain version, board papers, working correspondence and conflict register; monitor later events requiring update; preserve records. |
Valuer-side checklist
Defensible assignment file
| Workstream | Minimum evidence |
|---|---|
| Acceptance | Legal trigger, competence, registration, independence, resources and fee terms. |
| Scope | Signed engagement, asset/unit of account, basis, premise, date, users and restrictions. |
| Information | Source log, reliability testing, missing-data requests and management representations. |
| Analysis | Approaches considered, methods selected/rejected, inputs, adjustments and judgment log. |
| Quality control | Independent model review, cross-checks, sensitivity, reconciliation and draft-change log. |
| Report | All rule 8(3) content, assumptions, limitations, conclusion and signature by authorised relevant-class valuer. |
| Retention | Working papers for at least three years and longer where required. |
| Aftercare | Regulatory cooperation, complaint response, confidentiality and post-valuation conflict restriction. |
Red flags
Review signals requiring immediate escalation
| Red flag | Why serious | Escalation |
|---|---|---|
| Value conclusion circulated before model/data | Indicates result-first process. | Pause and document independent scope. |
| Different forecasts given to different valuers | Creates inconsistent, manipulated outcomes. | Single controlled forecast with reconciliations. |
| Material related-party balances omitted | Distorts net debt, earnings and recoverability. | Obtain complete related-party schedule. |
| No rights analysis for preference shares | Can materially misallocate equity value. | Model liquidation, conversion, anti-dilution and participation rights. |
| Inspection claimed but unsupported | Potential false statement. | Verify evidence and correct report. |
| Boilerplate disclaimer disowns all data | Rule/code do not permit disclaiming professional responsibility. | Rewrite limits and describe procedures. |
| Success fee or contingent appointment | Threatens independence. | Change fee terms or decline. |
| Inactive/surrendered registration | Report may not satisfy statutory appointment. | Verify live status before work and signature. |
| Stale valuation date | Value may no longer reflect facts. | Update or clearly assess subsequent events. |
| Arithmetic bridge does not reconcile | Signals model error or double counting. | Independent model audit before issue. |
Finin2min Q&A
Questions professionals most often ask
Can any CA issue a section 247 valuation?
No. Professional qualification alone is insufficient; registration for the relevant asset class and RVO membership are required.
Can management appoint the valuer?
The statutory appointment is by the audit committee or, in its absence, the Board.
Can a valuer use another expert?
Yes, with full disclosure, but the lead valuer retains responsibility for the resultant valuation.
Are IVS mandatory for every Companies Act valuation?
Not solely because of the April 2026 IBBI circular, which applies to IBC valuations. Rule 8 and the applicable legal/standard framework must be assessed.
Can the report use a success fee?
The Model Code prohibits success fees for an independent valuer.
Is one method mandatory?
No. Method selection depends on the asset, purpose, basis, market and data; the valuer must explain the choice.
Can a disclaimer eliminate liability?
No. Caveats may explain genuine limitations but cannot disclaim the valuer’s expertise or duty of care.
How long are records retained?
At least three years, and longer where contract, litigation, Tribunal or regulatory requirements demand.
Does section 247 cover liabilities and net worth?
Yes, its language expressly includes net worth and liabilities.
What is the six-year conflict window?
No direct/indirect interest during three years before appointment or three years after the valuation.
Final revision
Chapter XVII in one control chain
Remember 247(1)
Trigger, registered valuer and appointment.
Remember 247(2)
True/fair, due diligence, rules and independence.
Remember 247(3)
Rs. 50,000; fraud can mean imprisonment and higher fine.
Remember 247(4)
Refund fee and damages after conviction.
Remember Rule 8
Standards, external input, retained liability and report contents.
Remember 2026 overlay
IVS and detailed formats are mandatory for IBC valuations, not automatically all Companies Act valuations.