The Companies Act 2013 (Section 247) introduced the concept of Registered Valuers — professionals registered with the Insolvency and Bankruptcy Board of India (IBBI) who can conduct valuations for specified corporate law purposes. This was a landmark reform bringing regulation and standards to the Indian valuation profession.
When is a Registered Valuer Required?
- Mergers and demergers: Valuation of assets and share swap ratio
- Buy-back of shares
- Further Public Offer (FPO) / Rights Issue pricing
- ESOPs: FMV of unlisted company shares
- IBC resolution plans: Liquidation value and fair value
- Significant transactions under Section 192
- Investment in subsidiary (Section 186)
Eligible Professionals for Registration
- Chartered Accountants (for Securities and Financial Assets)
- Chartered Accountants, Cost Accountants, Company Secretaries (for Securities)
- Engineers, Architects (for Plant & Machinery, Land & Buildings)
- Must be member of a Registered Valuer Organisation (RVO)
Asset Classes
- Land and Buildings: Architects/valuers registered for this class
- Plant and Machinery: Engineers/valuers registered for P&M
- Securities and Financial Assets: CAs/CSs/CWAs
Registration Process (IBBI)
- Become member of an IBBI-recognized RVO (ICAI RVO, ICSI RVO, ICAV, etc.)
- Complete RVO training and pass valuation examination
- Apply to IBBI for registration with experience proof
- Registration valid for 3 years (renewable)
Valuation Standards
IBBI prescribed Valuation Standards (IBBI VS) aligned with International Valuation Standards (IVS). Registered Valuers must follow these standards in all valuations.
Liability of Registered Valuer
- If valuation report found defective: IBBI can take disciplinary action
- Civil liability for loss caused by negligent valuation
- Criminal liability if valuation fraudulently inflated/deflated
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