Valuation Services — How a Registered Valuer Engagement Actually Runs

Most people commissioning a valuation for the first time expect to receive a number. What they actually receive is a document of forty or fifty pages in which the number occupies a single line, surrounded by the assumptions, methods and limitations that produced it. That structure is not padding. It is the report, and the number is a consequence of it.

Understanding that changes how the engagement should be run. The questions worth asking at the outset are what the valuation is for, on what basis of value, as at what date, and who will rely on it. Those four answers determine the method, the evidence required and whether the report will hold when someone disagrees with the conclusion — which, in most of the situations where valuations are commissioned, someone eventually does.

N D Savla & Associates carries out valuation engagements for companies across Mumbai, Navi Mumbai, Thane and Goa — businesses, securities, tangible assets and intangibles — and reviews reports prepared by others. This page covers how an engagement runs. The statutory framework governing who may act is dealt with under registered valuer services.

What Defines a Valuation Engagement?

Four parameters are fixed before any analysis begins, and every subsequent decision follows from them.

Which Approach Applies?

Three approaches exist, and current standards require all three to be considered even where only one is ultimately applied. Explaining why an approach was rejected is as much a part of the report as explaining why one was adopted.

The income approach. Value is derived from expected future economic benefits, discounted to present value. Discounted cash flow is the dominant method, and the quality of the answer depends entirely on the quality of the projections and the discount rate build-up. A financial model prepared without testing management forecasts against historical performance produces a valuation that will not survive examination. Capitalisation of earnings is the simplified variant used where cash flows are stable.

The market approach. Value is derived from prices observed for comparable assets or businesses — listed company multiples, precedent transactions, or actual sales of similar property. The judgement lies in comparability and in the adjustments made for differences in size, growth, risk and marketability. A comparable set selected without stated criteria is the most common weakness in reports we review.

The cost or asset approach. Value is derived from the cost of recreating the asset, or from the net realisable value of the underlying assets less liabilities. It dominates plant and machinery valuation, where replacement cost less depreciation for physical, functional and economic obsolescence is the standard method, and it provides the floor in business valuations of asset-heavy or loss-making entities.

What Should a Valuation Report Contain?

Report content is no longer a matter of professional preference in several contexts. The Insolvency and Bankruptcy Board of India prescribed standardised formats through a circular issued in June 2026, applying across corporate insolvency, liquidation, voluntary liquidation, pre-packaged insolvency and personal guarantor bankruptcy proceedings.

• A defined set of minimum content items that every report must address
• The valuer's registration number displayed on every page of the report
• Separate standardised templates for land and building, plant and machinery, and securities or financial assets
• A coordinating valuer framework where more than one asset class is involved, with the coordinating valuer aggregating asset-class values and accounting separately for synergies
• Specified parameters for the valuation of receivables
• Written justification wherever an asset is assigned zero value or omitted from the report
• Physical verification of assets, rather than reliance on records alone

Outside the insolvency framework the format is less prescriptive, but the substance expected is the same: purpose, basis and date; the information relied upon and its source; the procedures performed; the approaches considered and the reasoning for those adopted and rejected; assumptions and limiting conditions; and restrictions on use. Reports supporting a scheme of arrangement are read by a tribunal, and the reasoning is what carries them.

How Has Valuation Practice in India Been Formalised?

For most of India's corporate history, valuation was an experience-based practice rather than a regulated profession, and the change to that position has come very recently and very quickly. Formal valuation in India traces to land acquisition, where officers under the Land Acquisition Act, 1894 determined market value for compensation. Beyond that, valuation grew up around specific statutes rather than as a discipline in its own right. The Wealth-tax Act introduced a category of registered valuers for its own purposes, and various asset classes developed their own conventions, but there was no common qualification, no shared standards and no disciplinary mechanism. A valuation was as good as the reputation of the person signing it.

Liberalisation exposed the gap. Foreign investment, private equity, mergers and the growth of the securities market all required valuations that counterparties and regulators would accept, and the absence of any framework meant that reports varied enormously in rigour. Litigation over valuation became routine, and courts frequently found themselves choosing between two irreconcilable reports with no professional standard against which to test either.

The Companies Act, 2013 addressed this through Section 247, requiring valuations under the Act to be conducted by a person registered as a valuer. Implementation took four years: the Companies (Registered Valuers and Valuation) Rules, 2017 were notified in October 2017, with the Insolvency and Bankruptcy Board of India designated as the authority administering the framework, and registered valuers became mandatory for valuations under both the Companies Act and the Insolvency and Bankruptcy Code with effect from 1 February 2019.

The Code itself drove demand and set expectations. Every corporate insolvency resolution process requires fair value and liquidation value to be determined by registered valuers, and those two figures anchor every commercial negotiation that follows. Valuation moved from a supporting document to the central financial fact in a proceeding, and the scrutiny applied to it increased accordingly.

Standardisation followed in 2026, and it arrived in a cluster. The Board replaced the loose reference to internationally accepted standards with International Valuation Standards, binding from 1 April 2026 across every process under the Code. Amendments to the corporate insolvency, liquidation and pre-packaged insolvency regulations in February and May 2026 tightened appointment timelines, required physical verification and mandated uniform report formats. A circular in June 2026 then prescribed the content of reports in detail, including the coordinating valuer mechanism for multi-asset engagements. Separately, the Income-tax Rules, 2026 introduced a distinct registered valuer framework for tax purposes with its own examination and reporting requirements.

We settle the four parameters before we start. Purpose, basis, premise and date, agreed in writing. Most valuation problems we are asked to fix originate in an engagement where these were assumed rather than stated.

Reports written to be challenged. Assumptions exposed, approaches reconciled, discounts justified. A report that shows its reasoning takes longer to write and far less time to defend.

Current with the 2026 requirements. International Valuation Standards binding under the Code from April 2026, prescribed report formats from June 2026, revised appointment timelines and the coordinating valuer framework. Reports prepared to the earlier practice no longer meet the requirement.

Review of reports prepared by others. We review third-party valuations for boards, investors and litigants — testing the basis, the comparables, the discount rate and the discounts applied. This is often more valuable than a second valuation, particularly in due diligence where the question is whether the seller's report can be relied on.

Six offices across Maharashtra and Goa. Andheri, Charni Road, Vashi, Thane, New Panvel and Panaji. Physical verification is now expected rather than optional, and being able to reach a site without a travel budget attached keeps engagements proportionate.