Valuation Advisory in Jaisalmer

What Is Valuation Advisory?

Valuation advisory is guidance on valuation itself, rather than the preparation of a valuation report. It helps a company, promoter, investor or lender decide whether a valuation is needed, what kind, under which law, from which professional, on what basis and at what time, and then helps them brief the valuer, review the result and use it properly.

Valuation questions in India are shaped by several overlapping frameworks. The Companies Act, 2013 requires certain valuations by registered valuers registered with the Insolvency and Bankruptcy Board of India in the relevant asset class. FEMA prescribes pricing guidelines for transactions with non-residents, certified by a chartered accountant, SEBI-registered merchant banker or practising cost accountant as applicable. Income tax law has its own fair market value rules, which for unquoted shares now sit in the Income-tax Rules, 2026 with effect from 1 April 2026. Lenders have their own panels and formats. Accounting standards require fair value measurements in financial statements. A valuation prepared for one purpose may not serve another.

Valuation advisory sorts out these questions before money is spent on the wrong report, and gives a second pair of eyes on valuation reports that have already been prepared. Valuation, due diligence and professional opinion are different things. A valuation estimates value; due diligence investigates facts; a professional opinion is a formal view given by a qualified professional, such as a legal opinion or a certificate. An indicative valuation prepared for planning or negotiation is not a statutory valuation. Where the law requires a valuation or certificate from a registered valuer, a SEBI-registered merchant banker, a chartered accountant or a cost accountant, that report must be issued and signed by that professional, and we coordinate with the appropriate registered professional.

Who Needs Valuation Advisory?

• Companies unsure which valuations a planned transaction requires
• Promoters and founders planning share issues, transfers or buy-outs
• Investors and lenders who want an independent view of a valuation report
• Boards and audit committees reviewing valuation assumptions
• Parties in valuation disputes or negotiations
• Companies needing periodic valuations for ESOPs, impairment or reporting
• Businesses choosing between valuers or reviewing a valuer's proposal

When Is Valuation Advisory Required?

It is not a legal requirement, but it is valuable when:

• A transaction touches more than one valuation rule, such as an issue to a non-resident under the Companies Act and FEMA
• The law requires a registered valuer, merchant banker or chartered accountant and the choice is unclear
• A valuation report has been received and its assumptions need review
• The valuer's report was prepared for a purpose different from the current need
• Two valuations differ and the difference has to be understood
• A dispute or negotiation turns on value
• The validity period or date of a valuation may have lapsed

What Our Valuation Advisory Includes

The advisory is tailored to the question and typically covers:

• Understanding the transaction, purpose, parties and timing
• Mapping valuation requirements: Companies Act, FEMA, income tax, SEBI, lenders and accounting standards
• Identifying which professional is eligible and in which asset class or category
• Checking independence and eligibility of the proposed valuer, including registration status
• Choice of valuation date, standard of value and methods
• Scope and brief for the valuer, and information pack
• Review of valuation reports: methodology, assumptions, data, consistency and compliance with the applicable rule and standards
• Comparison of valuations and reconciliation of differences
• Validity period and update triggers
• Support in negotiations: what ranges are defensible
• Support in responding to queries from investors, auditors, lenders or authorities on valuation
• Referral to the appropriate registered professional where a statutory report is needed

Legal and Practical Considerations

Registered valuers. Under Section 247 of the Companies Act, 2013 and the Companies (Registered Valuers and Valuation) Rules, 2017, a valuation required under the Act must be done by a registered valuer, registered with IBBI through a registered valuer organisation in the relevant asset class, who must be independent and follow the code of conduct and valuation standards under the rules. Registration status can be checked on the IBBI records.

FEMA. For unlisted shares issued to or transferred from non-residents, the Non-debt Instruments Rules, 2019 require pricing based on an internationally accepted methodology on an arm's length basis, certified by the professional the rules prescribe for that transaction. The pricing floor or cap and the reporting timelines apply.

Income tax. Valuation for tax purposes follows the prescribed rules. With the Income-tax Act, 2025 effective from 1 April 2026, the relevant rules are in the Income-tax Rules, 2026. The rule, method and certifying professional should be verified with a tax professional.

Review is not re-issuing. Our review of a valuation report is an advisory review of reasonableness and compliance. It is not a statutory valuation and does not replace the signing professional's responsibility.

Independence. A statutory valuer must be independent and eligible. A person with an interest in the transaction should not sign.

Standards. Valuation reports should follow the applicable valuation standards, such as those adopted under the registered valuer rules and internationally recognised standards, and state basis, assumptions and limiting conditions.

Changes in rules. Valuation rules and notified formats change. Advice reflects the position on the date given and should be refreshed.

Common Mistakes in Using Valuations

• Using a valuation prepared for another purpose
• Engaging a valuer who is not registered or eligible for the purpose
• Not checking the valuer's independence
• Accepting a valuation without reviewing assumptions
• Valuation date or validity not matching the transaction
• Assuming one valuation will satisfy Companies Act, FEMA and tax
• Not reconciling differences between two valuation reports
• Briefing the valuer with unrealistic or incomplete information

Professional Fees, Government Fees and Timeline

Advisory carries no government fee. Fees of registered valuers, merchant bankers, chartered accountants and cost accountants for valuation reports are separate and set by them. Our professional fees depend on the number of valuations and rules involved, the complexity of the review and urgency. Advisory on requirements typically takes 3 to 7 working days, and a review of a valuation report typically takes 3 to 7 working days after the report and supporting information are received.

Valuation Advisory vs Business Valuation vs Due Diligence

Valuation advisory advises on valuation requirements, choices and reports. Business valuation produces an indicative valuation. Due diligence investigates facts about a business. Related services include Business Valuation, Company Valuation and Transaction Due Diligence.

Need Professional Assistance With Valuation Advisory?

Getting the valuation question right at the start can save time, cost and rejected reports. The Legal Bank can help you work out what you need and review what you have. Share your requirement to discuss the next steps.