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1. VALUATION PROFESSION IN INDIA
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Valuation Profession in India
Valuation is the process of determining ‘the Economic Worth’ of an Asset or Liability under certain
‘Assumptions (Properly defined)’ and ‘Limiting conditions (explicitly mentioned)’ and subject to the ‘data
(MRL)’ available on the ‘Valuation date (key to the valuation)’
Indian economy has witness the proliferation of a profession in the field of “Valuation” which has shown a
rapid growth during a short span of 4 years. As on 30th June 2021, more than 4,000 RVs were registered
with the Insolvency and Bankruptcy Board of India (IBBI), out of which almost 1600 RVs registered
under the Securities or Financial Assets Class.
Recognizing the need for institutionalizing and regulating the profession of Valuation under legal ambit,
effective 1st February 2019, the concept of Registered Valuer was introduced through Section 247 of the
Companies Act, 2013 which provides that where a valuation is required to be made under the provision of
this Act, it shall be valued by a person who, having the necessary qualifications and experience, and being
a member of a Registered Valuer Organization (RVO), is registered as a Valuer.
Central Government has notified Companies (Registered Valuers and Valuation) Rules, 2017 (Rules)
which provide for a complete framework for development and regulation of profession of Valuation and
the power of the authority have been delegated to Insolvency and Bankruptcy Board of India (IBBI). A
Code of Conduct has been prescribed which has to be mandatorily adhered to by the Registered Valuers in
addition to the requirements of the Companies Act, 2013 and other applicable laws.
A profession, eventually, is only as good as its members. Hence, the Valuer Members need to be an
amalgam of the qualities such as independent, impartial, fit and proper, competent, duly qualified and
experienced to undertake a valuation assignment.
He is expected to act in good faith in discharge of his duties, with the utmost integrity, objectivity,
independence, impartiality in the performance and to seriously pursue the highest standards of
professionalism.
As an important stakeholder of the ecosystem, Registered Professionals (RVs) are required to maintain
fine balance between high degree of proficiency and ethical standards which accentuate the need of best
practices to be followed.
Valuation in its entirety is the most decisive and, in fact, the most important aspect on which the entire
decision making process is dependent.
The valuation report is developed and prepared by exercising judicious discretion by the Registered
Valuer, by considering the relevant factors.

2. There will always be several factors, e.g. management capability, present and prospective competition,
yield on comparable securities, market sentiment, etc. which may not be apparent from the Balance Sheet
but they can have a significant impact on value.
Any change in the assumptions or factors which has an influence on valuation may impact the Value.
Therefore, utmost care and caution must be exercised by the Valuers while deriving the value and must
produce and present a detailed and fully reasoned valuation report that covers all aspects in detail.
Further, the strength and efficiency of a Valuation process and in turn its outcome will remain undiluted
only if the RVs observe high standards of professional ethics.
Various processes such as Corporate Insolvency Resolution Process (CIRP), Merger & Acquisition,
Investment Analysis, Capital Budgeting etc. is dependent upon the final outcome that has been reported in
the Valuation Report and as such the Valuer plays a key role in the development of economy. A Valuer by
being entrusted with the responsibility of arriving at valuation; upon which the entire decision of
stakeholders is being dependent upon; remains a key player in the exercise.
It is utmost important that a Valuer exercise due diligence and ensure high standards of integrity and
fairness in all his dealings during the course of discharge of his duties so that the Valuation Report is fully
reasoned and presents an accurate and reasonable value of the asset under valuation.
Valuation profession has a great future and prove to be a value creation for Indian Economy.