Synergies in Fair Value 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.
For most of the Code's life, fair value was a sum of parts. The resolution professional allotted assets to three classes, each valuer priced their own class in isolation, and the three numbers were added up.
Anything that did not sit inside an asset class fell through the gap — carry-forward tax losses, self-generated brand value, customer relationships, digital assets never capitalised in the books.
That changed in February 2026.
An explanation inserted into the fair value definition in the CIRP Regulations now requires the total estimated realisable value of all the assets of the corporate debtor, expressly including tangible and intangible assets together with their underlying synergies. Valuation moved from sum-of-the-parts to a single enterprise-level fair value.
What the definition now requires
Fair value must be computed on the corporate debtor as a whole — taking into account the total estimated realisable value of all of its assets, including but not limited to tangible and intangible assets, together with their underlying synergies.
The practical consequence for a valuer is a change of remit. You can no longer confine yourself strictly to the assets formally allotted to your asset class. The exercise is to look at the business holistically, including value that never appeared in the books.
Examples the reform is aimed squarely at:
- carry-forward tax losses, which retain real value through the tax shield available to an acquirer even after a full change in shareholding; Deferred tax assets →
- self-generated brand value, which a company that built rather than bought its brand could never capitalise;
- customer relationships and contracted revenue;
- digital assets and technology never recognised on the balance sheet.
How it is delivered — the aggregated fair value
The definition alone would not have worked. The mechanism is what makes it operate.
The RP appoints two sets of registered valuers. Each set contains one valuer for each asset class — Land and Building, Plant and Machinery, Securities or Financial Assets. Within each set, one valuer is designated the Coordinator Valuer, and consolidates the other two reports into a single enterprise value for that set — capturing the synergies and going-concern items that fall outside any individual class.
The RP then averages the two aggregated fair values and places one number before the CoC.
Not three asset-class figures. One. How the coordinator valuer works →
Why the reform happened
Two cases explain it better than any policy statement.
Videocon. In India's first major group insolvency, each constituent company was valued standalone, on a sum-of-the-parts basis. The valuers took the view that, absent judicial precedent at the time, no synergy value could safely be assumed. The regulatory view was the opposite — the synergy inherent in a consolidated group should have been factored in. Courts in the same matter also observed that it was unusual for resolution values to converge so closely with liquidation values.
ICICI Bank v. Unimark Remedies. A pharmaceutical company that was one of only six manufacturers worldwide capable of producing a particular class of medicine. Both registered valuers ascribed nil value to its patents — estimated at around ₹200 crore — purely because the company had received a regulatory warning letter.
Because both arrived at the same nil figure, the RP initially declined to appoint a third valuer: a third valuer is warranted where two values significantly diverge, and zero against zero showed no divergence at all. The NCLT eventually directed that intangible assets cannot be valued on a nil or negative basis without proper justification, since undervaluation directly defeats the Code's objective of value maximisation.
That is the failure mode the reform targets: not disagreement, but agreement on a wrong answer. Pharma patent exclusivity →
Are synergies still acquirer-specific?
Yes — and that tension has not disappeared, it has been relocated.
Different acquirers capture different synergies. A competitor in the same sector realises cost synergies a financial buyer cannot. So a single enterprise fair value cannot be equally achievable for every bidder.
What the reform does is decide that the greater risk was omission, not overstatement. IBBI's own data made the case: value realised through approved resolution plans has run at roughly 167% of liquidation value but only around 95% of fair value — while realisation against total admitted claims sits near 30%, implying haircuts around 69%. A meaningful part of that gap was value never recognised in the first place.
What this means in practice for the valuer: synergies now belong inside the enterprise fair value, but the assumptions behind them must be visible. Identify them, quantify them, state which are generic to any competent acquirer and which depend on a particular kind of buyer, and sensitise them. The standardised reporting format requires assumptions and their reasoning on the face of the report. Assumptions and sensitivity →
Key takeaways
- Fair value is now enterprise-level, not a sum of asset classes.
- Intangibles and underlying synergies are expressly in the definition.
- Carry-forward losses survive a change in shareholding and carry value for an acquirer.
- Two sets of valuers, each with a coordinator, produce two aggregated values that are averaged.
- The CoC receives one number.
- Unimark established that intangibles cannot be valued nil without justification.
- Synergies are still acquirer-specific — so state the assumptions and sensitise them.
Read next
- The Coordinator Valuer and Aggregated Fair Value
- Fair Value vs Liquidation Value Under IBC
- Valuation of Intangible Assets Under IBC
- Deferred Tax Assets and Carry-Forward Losses in IBC Valuation
Disclaimer: Positions stated as on 5 September 2026 and reflect the February 2026 amendments to the CIRP and Liquidation Process Regulations. Verify the current text on ibbi.gov.in before relying on any of it.