25 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.
Two sets of valuers look at the same corporate debtor and produce two enterprise-level numbers. They will not match.
The question is how far apart they have to be before somebody else is brought in — and, since February 2026, that question has a clearer answer than it used to.
A third valuer is appointed where the variance between the fair value and liquidation value estimates of the two sets exceeds 25%. Within that threshold, the average of the two aggregated estimates is taken and reported to the CoC. The comparison is now between two enterprise-level numbers, not two views of one asset class.
What the threshold is now
Before the February 2026 reforms, Regulation 35 spoke of estimates that were "significantly different", and 25% was the figure applied in practice rather than a stated rule. That left the trigger to the resolution professional's judgment, with all the argument that invites.
The reformed framework clarifies it: a third valuer is appointed only where the variance between the two sets' estimates exceeds 25%. Below that, the average of the two aggregated estimates stands.
Two structural changes come with it:
The comparison is enterprise-level. Each set produces one aggregated fair value, consolidated by its Coordinator Valuer. So the 25% test runs between two whole-business numbers, not between two land valuations. The coordinator valuer and aggregated fair value →
Divergence inside a set is resolved inside the set. Where the plant valuer and the brand valuer in the same set are working on inconsistent bases, the coordinator has to reconcile that before the set produces its number. Previously that inconsistency travelled straight to the CoC unexplained.
Why the reform was needed
The scale of the problem was not marginal.
In one matter involving a sugar company in Jaipur, three registered valuers valued the same parcel of land at ₹1,000 crore, nil, and ₹52 crore.
IBBI reviewed fifteen matters in which a third valuer had to be appointed for significant variance. In thirteen of the fifteen, the gap between the highest and lowest fair value estimates exceeded 100%.
IBBI attributed this largely to the absence of a uniform approach and well-defined standards among valuers, rather than to anything inherently unreliable about valuation itself — which is why the response was mandatory IVS adoption and a standardised reporting format rather than a tighter divergence rule alone. IVS for IBC valuations →
The problem a divergence rule cannot solve
A threshold catches disagreement. It does not catch agreement on a wrong answer — and that turned out to be the more damaging failure.
In ICICI Bank v. Unimark Remedies, a pharmaceutical company 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 on account of a regulatory warning letter the company had received.
The RP initially declined to appoint a third valuer, and the logic was internally sound: 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, because undervaluation directly defeats the Code's objective of value maximisation.
The lesson for an RP is that the 25% test is a floor on scrutiny, not a ceiling. Two identical numbers are not evidence of correctness — and where both sets have written off a material asset class, that is a reason to ask questions, not a reason to stop. Intangibles under IBC →
Preventing divergence rather than resolving it
The framework now builds prevention into the process, and an RP should use it.
The pre-valuation methodology meeting. The RP convenes a meeting between the registered valuers and the CoC before valuation work begins in earnest, at which each valuer explains the methodology and key assumptions they propose to adopt. Where the CoC sees a material difference in approach at that stage, it can raise it before any number is finalised.
That is the single most effective control available, because divergence is usually manufactured at the briefing stage rather than in the analysis.
Alongside it:
- a common scope of work for both sets;
- the same valuation date — the insolvency commencement date;
- a shared assumption set for matters outside a valuer's own expertise;
- the same asset schedule;
- mandatory IVS, which removes the old latitude for two valuers to follow different but equally legitimate standards and reach different answers honestly.
What the RP should record
- both sets' aggregated estimates, and the variance computed and stated;
- whether the variance exceeded 25%, and what followed;
- if a third valuer was appointed — the appointment and how the final figure was arrived at;
- the pre-valuation methodology meeting: who attended, what was discussed, what the CoC raised;
- any CoC request for further scrutiny and how it was handled;
- where both sets valued a material asset at nil — the justification, per Unimark.
Key takeaways
- Variance above 25% between the two sets brings in a third valuer.
- Within the threshold, the average of the two aggregated estimates is reported.
- The test is enterprise-level now, not asset-class-level.
- Thirteen of fifteen reviewed cases had gaps above 100% — the problem was real.
- Zero against zero is not agreement. Unimark requires justification for a nil intangible valuation.
- The pre-valuation methodology meeting is the real control.
- Mandatory IVS removes standard-shopping as a source of honest divergence.
Read next
- The Coordinator Valuer and Aggregated Fair Value
- Regulation 35: Determining Fair Value and Liquidation Value
- International Valuation Standards for IBC Valuations
- Valuation of Intangible Assets Under IBC
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.