IBBI Registered Valuers:

Valuation profession has been in existence since long time. However, valuation as a profession was neither under the purview of any authority nor any specific guidelines or standards were issued for the same. For the first time, Companies Act, 2013 incorporated provisions of Registered Valuers in the year 2017 and made mandatory to obtain reports from Registered Valuers. Therefore, with effect from February 01, 2019, only registered valuers can undertake valuation under (i) the Companies Act, 2013 and (ii) the Insolvency and Bankruptcy Code, 2016.

Valuation Requirements:

Under the provisions of the Companies Act, a Registered Valuer’s report on valuation of equity shares is mandatory in the following situations:

Ø  Issue of new shares to shareholders under Section 62 except in case of a rights issue

Ø  Merger, amalgamation or restructuring under Section 230-232, requiring a valuation of assets or shares, or requiring a swap ratio to be calculated for a share swap on merger of two companies

Ø  Acquisition of minority shareholding under Section 236 by existing shareholders who hold over 90% of the company’s shares

Ø  Allotment of shares for consideration other than cash and issue of sweat equity

Ø  Buyback of shares from some or all shareholders under Section 68

Ø  Liquidation Value & Fair Value in corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code, 2016

Ø  Liquidation of a company under the Insolvency and Bankruptcy Code, 2016

A Registered Valuer’s report on valuation of equity shares is also recommended or considered “good to have” in the following situations:

Ø  Rights issue to existing shareholders under Section 62

Ø  Capital reduction of a company under Section 66

Ø  Any other corporate actions that involve a value being assigned to equity shares or securities