What Is a Registered Valuer?
A Registered Valuer is a professional or entity registered with the Insolvency and Bankruptcy Board of India (IBBI) under Section 247 of the Companies Act, 2013 and the Companies (Registered Valuers and Valuation) Rules, 2017, and authorised to give a legally recognised opinion on the value of specific assets. Wherever the Companies Act, 2013 requires a "valuation" of property, shares, securities, goodwill, or net worth, that valuation must be carried out by a Registered Valuer — not by any chartered accountant, merchant banker, or other professional acting informally.
For a foreign company or investor in India, Registered Valuers surface in three recurring situations: a preferential allotment of shares, a merger or scheme of arrangement, and a corporate insolvency resolution process (CIRP). Confusingly, none of these is the same "valuer" required for FEMA pricing compliance or income-tax fair market value computations — a distinct point covered below.
Legal Basis
Section 247 of the Companies Act, 2013
Section 247(1) provides that where a valuation is required in respect of any property, stocks, shares, debentures, securities, goodwill, or any other assets, or the net worth or liabilities of a company, under the Companies Act or its rules, "it shall be valued by a person having such qualifications and experience, registered as a valuer and being a member of an organisation recognised, in such manner, on such terms and conditions as may be prescribed", appointed by the company's audit committee or, in its absence, by the Board of Directors. Section 247(2) requires the valuer to make an impartial, true, and fair valuation, exercise due diligence, follow the prescribed rules, and never value an asset in which they hold a direct or indirect interest.
The Companies (Registered Valuers and Valuation) Rules, 2017
The operating rules were notified on 18 October 2017 and amended several times since, most recently by the Companies (Registered Valuers and Valuation) Amendment Rules, 2026 (G.S.R. 432(E), 1 June 2026), which substituted rule 12(1)(i) to require a Registered Valuers Organisation (RVO) incorporated under section 8 of the Companies Act, 2013 (or section 25 of the 1956 Act) to have a minimum paid-up share capital of INR 25 lakh, with an existing RVO that falls short given until 31 March 2028 to comply. An RVO — recognised by the IBBI — trains, examines, and recommends individuals for registration; the IBBI itself grants the certificate.
The Three Asset Classes
Registration is asset-class specific. A Registered Valuer for one asset class cannot value assets in another class. Annexure IV to the 2017 Rules sets out three classes, each with its own eligibility path:
| Asset Class | Typical Qualification | Minimum Experience |
|---|---|---|
| Plant and Machinery | Graduate in mechanical, electrical, electronic, chemical, textile, metallurgical, or aeronautical engineering (or equivalent); or a postgraduate in the same | 5 years (graduate) / 3 years (postgraduate) |
| Land and Building | Graduate in civil engineering, architecture, or town planning (or equivalent); or a postgraduate, including a two-year full-time postgraduate course in real estate valuation | 5 years (graduate) / 3 years (postgraduate) |
| Securities or Financial Assets | Member of ICAI, ICSI, or the Institute of Cost Accountants of India, or an MBA/PG diploma in finance; or a postgraduate in finance | 3 years |
The Central Government may also specify "any other asset class" with its own qualification path, but the three classes above cover the assets a company most commonly needs valued.
Eligibility and Registration
Beyond the class-specific qualification and experience, an individual must be a valuer member of an RVO, be recommended by it for registration, have passed the IBBI's valuation examination for the relevant asset class within the preceding three years, be resident in India, and be a "fit and proper person" — not an undischarged bankrupt, not convicted of an offence carrying more than six months' imprisonment or involving moral turpitude, and not penalised under section 271J of the Income-tax Act, 1961 for incorrect information in a valuation report. A partnership entity or company can also register, provided three (or all, if fewer) of its partners or directors are themselves registered valuers, and at least one of them is registered for the asset class the entity seeks to value.
The application carries a non-refundable fee of INR 5,000 for an individual (Form A of Annexure II) or INR 10,000 for a partnership entity or company (Form B), with a certificate granted within 60 days of the application or reasons for a prima facie refusal communicated within 45 days. A registered valuer must keep records of each assignment for at least three years and may value only the asset class for which they are registered.
When a Registered Valuer's Report Is Legally Required
Three provisions account for almost every case a foreign-invested Indian company will encounter:
- Preferential allotment of shares — Section 62(1)(c). When a company issues further shares to specified persons (rather than pro rata to existing shareholders) under a special resolution, for cash or otherwise, the shares may be issued only "if the price of such shares is determined by the valuation report of a registered valuer, subject to the compliance with the applicable provisions of Chapter III and any other conditions as may be prescribed." This is the provision most relevant to a later funding round priced above the FEMA floor price, an ESOP-linked issue, or a strategic share swap.
- Schemes of arrangement, amalgamation, and demerger — Sections 230–232. An application disclosing a scheme of corporate debt restructuring must be accompanied by "a valuation report in respect of the shares and the property and all assets, tangible and intangible, movable and immovable, of the company by a registered valuer" (section 230(2)(c)(v)), and a copy must go out with the notice of the members'/creditors' meeting. For a merger or amalgamation, the directors' report to shareholders under section 232(2)(c) must specify the share exchange ratio and any special valuation difficulties, supported by "the report of the expert with regard to valuation" under section 232(2)(d) — in practice a registered valuer's report, since the Tribunal will expect one before sanctioning the scheme.
- Corporate Insolvency Resolution Process (CIRP) — IBC Regulations 27 and 35. Under Regulation 27 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, as amended with effect from 25 February 2026, the resolution professional must, within 7 days of appointment (and not later than the 47th day from the insolvency commencement date), appoint two sets of registered valuers — one registered valuer per relevant asset class within each set — to determine the corporate debtor's fair value and liquidation value under Regulation 35 (a corporate debtor classified as a micro, small, or medium enterprise needs only one set, unless the committee of creditors records reasons to require two). The average of the two closest estimates is taken as the value, and the resolution professional may appoint a third set of registered valuers where the two estimates differ by twenty-five per cent or more, or where the committee asks for one for reasons recorded in writing.
Registered Valuer vs FEMA and Income-Tax Valuations
Foreign investors frequently assume that any share valuation in India must come from an IBBI Registered Valuer. It does not. Three separate valuation regimes exist side by side, and a person qualified under one is not automatically qualified under another:
- Companies Act valuations (preferential allotment, schemes, CIRP) require an IBBI Registered Valuer, as described above.
- FEMA pricing of FDI — the floor/ceiling price for issuing or transferring shares to or from a non-resident, governed by a valuation report under FEMA and the NDI Rules pricing guidelines — must instead be certified by a SEBI-registered Merchant Banker (mandatory if the discounted cash flow method is used) or a Chartered Accountant or practising Cost Accountant, using an internationally accepted pricing methodology on an arm's length basis. None of these categories requires IBBI registration as a valuer.
- Income-tax fair market value for unquoted equity shares, computed under Rule 11UA of the Income-tax Rules, 1962 — relevant, for example, to the fair-market-value comparison under section 92(2)(m) of the Income-tax Act, 2025 (section 56(2)(x) of the Income-tax Act, 1961) — is a third regime again: it is worked out under the Income-tax Rules rather than the Companies Act, and IBBI registration as a valuer is not what it turns on.
A single professional can hold more than one of these credentials — a chartered accountant can also be an IBBI Registered Valuer for the Securities or Financial Assets class — but the credentials are not interchangeable, and a report obtained under the wrong regime will not satisfy the provision that applies.
Conduct of Valuation and Report Contents
Rule 8 of the 2017 Rules requires every valuation to follow the notified valuation standards or, until those are notified, internationally accepted standards or the standards adopted by the valuer's RVO. The report itself must state: background on the asset valued; the purpose and appointing authority; the identity of the valuer and other experts involved; any conflict of interest; the dates of appointment, valuation, and report; inspections carried out; sources of information relied on; the methodology and standards followed; restrictions on use; the major factors considered; the conclusion; and caveats — which cannot be used to limit the valuer's responsibility for the report.
Penalties for Non-Compliance
Under section 247(3), as substituted by the Companies (Amendment) Act, 2020, a valuer who contravenes the section or its rules is "liable to a penalty of fifty thousand rupees". Where the contravention is made with intent to defraud the company or its members, the valuer faces imprisonment of up to one year and a fine of not less than INR 1 lakh, extending up to INR 5 lakh. On conviction under section 247(3), the valuer must also refund any remuneration received and pay damages for loss caused by an incorrect or misleading report (section 247(4)).
Practical Example
A US-headquartered SaaS company's wholly owned Indian subsidiary wants to issue a fresh tranche of equity shares to a strategic Indian investor at a price above what its existing shareholders paid, without offering the new shares pro rata to them first. Because this is a preferential allotment under section 62(1)(c), the subsidiary's board must obtain a valuation report from a Registered Valuer holding registration for the Securities or Financial Assets asset class before the special resolution is passed and the shares are allotted. Separately, because the investor is a non-resident, the issue price must also independently satisfy the FEMA floor price under the NDI Rules — certified by a SEBI-registered Merchant Banker or Chartered Accountant, not the Registered Valuer engaged for the Companies Act filing. The two reports serve two different statutes and cannot substitute for each other.
Common Mistakes
- Treating a Chartered Accountant's FEMA valuation certificate as satisfying Section 62(1)(c). A CA can certify FEMA pricing without being a Registered Valuer; the preferential allotment price still needs a report from someone registered under the 2017 Rules for the relevant asset class.
- Engaging a valuer registered for the wrong asset class. A Land and Building valuer cannot sign a Securities or Financial Assets report, and vice versa — Rule 7(c) makes this a condition of registration, not a formality.
- Assuming one registered valuer suffices in a CIRP. Regulation 27 requires two sets of valuers (one set for an MSME corporate debtor, absent a reasoned committee decision otherwise) so that the liquidation value can be cross-checked, not a single valuer's opinion.
- Forgetting the scheme-of-arrangement paper trail. The valuation report must be circulated with the notice of the members'/creditors' meeting under section 230(3), not produced only if the Tribunal later asks for it.
Frequently Asked Questions
Who regulates Registered Valuers in India?
The Insolvency and Bankruptcy Board of India (IBBI) is the authority designated under section 458 of the Companies Act, 2013 to register valuers and recognise the Registered Valuers Organisations that train and recommend them, under the Companies (Registered Valuers and Valuation) Rules, 2017.
Can one person be registered for more than one asset class?
Yes. Registration is granted separately for each asset class the applicant is qualified and examined for — Plant and Machinery, Land and Building, and Securities or Financial Assets — and a person can hold registration in more than one class if they meet the qualification, experience, and examination requirements for each.
Is a Registered Valuer the same as a SEBI-registered Merchant Banker?
No. These are separate credentials under separate regulators. A Registered Valuer is IBBI-registered under the Companies Act for statutory valuations such as preferential allotments, schemes of arrangement, and insolvency resolution; a SEBI-registered Merchant Banker (or a Chartered Accountant) certifies FEMA pricing for FDI transactions, a different regime entirely.
What happens if a company skips the registered valuer requirement for a preferential allotment?
The share price would not be validly determined under section 62(1)(c), exposing the allotment to challenge and exposing the valuer (if a non-registered person was used) and the company's officers to scrutiny; separately, a registered valuer who signs a false or negligent report faces the penalty, and in fraud cases the imprisonment and fine, prescribed under section 247(3).
Does a foreign investor ever need to appoint the registered valuer directly?
No — under section 247(1), the valuer is appointed by the Indian company's audit committee, or its Board of Directors if there is no audit committee. A foreign investor negotiating a share price should expect the Indian investee company to arrange the registered valuer's report as part of the transaction process.
See also: Valuation Report (under FEMA), Pricing Guidelines (FDI Valuation), and Insolvency and Bankruptcy Code (IBC) & CIRP.
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