Securities and Financial Valuation in India Determining Fair Market Value for Corporate Transactions

A Securities and Financial Valuer in India is responsible for determining the fair market value of financial assets such as stocks, shares, debentures, and other securities. These valuations are critical in corporate transactions like mergers, acquisitions, buybacks, demergers, and insolvency proceedings. They also play a key role in compliance with statutory regulations under the Companies Act, 2013, and are overseen by the Insolvency and Bankruptcy Board of India (IBBI) as “Registered Valuers.”

The key areas of work include valuing companies involved in mergers and acquisitions, assessing fair value for Initial Public Offerings (IPOs), and determining the value of shares for buybacks and demergers. Securities and financial valuers also conduct valuations for private equity investments, insolvency proceedings under the Insolvency and Bankruptcy Code (IBC), and for tax purposes. They ensure compliance with valuation mandates by SEBI and other regulatory bodies.

The role requires conducting thorough due diligence by gathering relevant financial and market data to accurately assess asset values. Valuers apply appropriate methodologies like discounted cash flow (DCF), market comparison, or asset-based valuation, depending on the type of asset. They prepare comprehensive valuation reports that clearly present findings, assumptions, limitations, and supporting data.

To practice as a Securities and Financial Valuer in India, one must be registered with the IBBI as a “Registered Valuer.” Chartered Accountants (CA), Company Secretaries (CS), and Cost Accountants are eligible to become registered valuers. Specialization in sectors like technology, healthcare, or real estate is also common to cater to specific valuation needs. Ethical standards set by IBBI and other professional bodies must be maintained throughout the valuation process.