AI in Valuation explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
AI tools are now genuinely useful in valuation work — for benchmarking comparables, surfacing royalty rates, and analysing sector recovery patterns faster than any analyst working manually.
They also cannot sign a report. That is not a technical limitation. It is the structure of the framework.
AI produces outputs from available data and an algorithm. It cannot substitute the professional expertise, judgment and understanding of the valuer, and the responsibility for evaluating information and reaching a conclusion stays with the registered valuer whose VRN is on the report and whose VRIN identifies it. Use it for research and analysis; disclose it where it materially informed the conclusion.
Where it genuinely helps
Comparable transaction search. Finding and filtering comparable sales across large datasets, which is exactly the kind of work that is slow and error-prone done by hand.
Royalty rate benchmarking. Surfacing licence rates by sector and product type — directly useful in relief-from-royalty work. Relief-from-royalty →
Sector recovery analytics. Patterns in realisation rates by asset type and sector, useful for setting assumptions where the debtor's own data is missing.
Document review. Extracting terms from hundreds of franchise or supply agreements — a real problem in an asset-light CIRP with an incomplete contract file. Brand and franchise valuation →
Reconciliation. Matching a fixed asset register against site findings, or a sales ledger against RERA filings.
Each of these is research and analysis support, and in a CIRP — where the deadline is statutory and the data is poor — the time saved is not trivial. Valuing when records are seized →
Where it stops
It cannot hold a registration. A valuation under the Code must come from a registered valuer, identified by a VRN, personally accountable. Since the February 2026 reforms the report itself also carries a VRIN — a Valuation Report Identification Number generated on the IBBI portal and printed in the left-hand footer of every page. Both numbers trace back to a person. There is no mechanism for an algorithm to be registered, and no one to discipline if the output is wrong. VRN, VRIN and liability →
It cannot exercise judgment. Choosing the basis of value, deciding whether a shut plant is a going concern, separating a temporary reputational hit from permanent brand impairment — these are judgments requiring reasoning that can be explained and defended. Going concern or realisable basis →
It cannot physically verify. Regulation 35 requires estimates computed after physical verification of the inventory and fixed assets. No dataset substitutes for standing in the plant. Why desk valuation fails →
It is only as good as its data. Comparable databases skew toward larger, better-documented, often non-Indian transactions. A model trained on those will mis-benchmark a mid-sized regional asset, confidently.
It cannot be cross-examined. The standard is that the valuation must be explainable in plain language with every number traceable. "The model produced it" is not traceability. Judicial scrutiny →
Using it defensibly
- Treat outputs as inputs. An AI-generated comparable set is a starting list to be assessed, not a conclusion.
- Verify the comparables individually for genuine comparability — sector, size, geography, date.
- Document what the tool was used for, and what the valuer did with it.
- Disclose it where it materially informed a conclusion, in the same way any other data source would be disclosed.
- Never let it set the basis of value or resolve a judgment.
- Sensitise anything derived from it, because model-derived benchmarks carry their own uncertainty. Assumptions and sensitivity →
Where this is heading
The direction of the framework is toward more accountability, not less. The February 2026 reforms made IVS mandatory from 1 April 2026, prescribed a standardised reporting format per asset class, introduced the VRIN on every page, required a pre-valuation methodology meeting with the CoC, and brought ESG factors into scope. IVS for IBC valuations →
That framework is entirely compatible with better tools, and largely indifferent to them. It asks a question no tool answers: who is responsible for this number, and can they explain it?
The registered valuer is, and must be able to.
Key takeaways
- AI is genuinely useful for comparables, royalty benchmarking, document review and reconciliation.
- It cannot hold a registration or sign a report.
- Judgment, verification and accountability stay with the valuer.
- Comparable databases skew away from mid-sized Indian assets.
- Treat outputs as inputs, and verify them individually.
- Disclose material use, as with any other source.
- "The model produced it" is not traceability.
Read next
- Assumptions and Sensitivity Analysis in a Valuation Report
- International Valuation Standards for IBC Valuations
- Judicial Scrutiny of Valuation Reports Under IBC
- Registered Valuer Under IBC: Appointment, Duties and Liability
Disclaimer: Positions stated as on 5 September 2026. General guidance only — professional responsibility for any valuation rests with the registered valuer.