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In India’s fast-changing corporate and regulatory environment, valuation is now a legal requirement in many business transactions. Whether you are a startup raising funds, a growing company issuing shares, or a business going through restructuring, an IBBI registered valuation may be necessary under Indian law.

However, many founders, CFOs, and compliance teams still do not understand when an IBBI valuation is required.

This 2025 checklist provides clear and practical explanations.

What Is an IBBI Valuation?

An IBBI valuation is a report prepared by a professional registered with the Insolvency and Bankruptcy Board of India (IBBI) under the Companies (Registered Valuers and Valuation) Rules, 2017.

These valuers can legally assess:

1.  Shares and securities
2. Businesses and enterprises
3. Land and buildings
4. Plant and machinery
5. Intangible assets like brand, goodwill, and IP

IBBI valuation reports are accepted by:

1. NCLT and courts
2. Insolvency professionals
3. Banks and lenders
4. ROC and MCA
5. Income Tax Department
6. RBI and FEMA authorities

Why IBBI Valuation Is So Important in 2025?

In recent years, regulators have increased scrutiny on:

1. Share pricing
2. Related party transactions
3. Capital raising
4. Mergers and acquisitions
5. Insolvency cases

The goal is straightforward: to ensure that shareholders, investors, and creditors are treated fairly and that corporate transactions occur at transparent and justifiable values.

As a result, valuation by an IBBI registered valuer has become the standard.

2025 Checklist – When Is an IBBI Valuation Mandatory?

Here are the key situations where Indian companies must obtain an IBBI valuation.

1. Insolvency and Bankruptcy Proceedings (IBC)

If a company enters:

1. Corporate Insolvency Resolution Process (CIRP)
2. Liquidation
3. Voluntary liquidation

then a valuation is necessary under Section 27 of the Insolvency and Bankruptcy Code.

Two IBBI registered valuers must be appointed to determine:

1. Fair value
2. Liquidation value

These figures affect resolution plans and creditor recoveries directly.

2. Preferential Allotment of Shares

When a company issues shares to:

1. Promoters
2. Directors
3. Investors
4. Related parties

it must get a valuation from an IBBI registered valuer under the Companies Act, 2013 and Share Capital Rules.

This prevents shares from being issued at unjustifiably low or inflated prices.

3. Private Placement & Fundraising

For startups and companies raising capital through:

1. Angel investors
2. Venture capital
3. Private equity
4. Strategic investors

a fair share valuation is needed for compliance, ROC filings, and tax purposes. In 2025, most auditors and regulators will expect this to be done by an IBBI valuer.

4. Issue of Shares for Non-Cash Consideration

If shares are issued in exchange for:

1. Land
2. Business
3. Brand
4. Technology
5. Intellectual property

then an IBBI valuation is required to determine the true value of the assets being transferred.

5. Merger, Amalgamation & Demerger

For corporate restructuring:

1. Share swap ratio
2. Asset values
3. Equity exchange

must be backed by a valuation report from an IBBI registered valuer and submitted to NCLT and shareholders.

6. Slump Sale or Business Transfer

When an entire business or division is sold, an IBBI valuation is used to determine:

1. Fair market value
2. Tax compliance
3. Deal justification

Banks, auditors, and tax authorities rely on these reports.

7. Buyback of Shares

When a company buys back its own shares, especially from promoters or investors, a valuation is required to ensure fairness and prevent price manipulation.

8. Related Party Transactions

Any transaction involving:

1. Promoters
2. Directors
3. Group companies

should be supported by an IBBI valuation to protect minority shareholders and meet corporate governance standards.

9. FEMA & Foreign Investment

  ⇒For:

1. FDI
2. Share transfers to or from non-residents
3. ESOPs issued to foreign employees

the valuation must follow RBI and FEMA pricing guidelines, and IBBI valuation reports are widely accepted here.

10. Income Tax & Regulatory Scrutiny

The Income Tax Department often requests valuation for:

1. Share premiums
2. Unlisted shares
3. Business transfers

An IBBI valuation carries legal credibility and helps avoid disputes and penalties.

Why You Should Not Use an Unregistered Valuer?

In 2025, using a non-IBBI valuer for statutory transactions can lead to:

1. ROC rejection
2. NCLT objections
3. Tax notices
4. FEMA non-compliance
5. Legal disputes

Only IBBI registered valuers are recognized for statutory corporate valuations.

Conclusion

If your company is issuing shares, raising funds, restructuring, selling a business, or handling insolvency, you should assume that an IBBI valuation is necessary unless specifically exempted by law.

It is no longer optional; it is an essential part of India’s corporate and financial compliance system.