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Transactions & Valuation

Valuation Services

Valuation of businesses, shares and assets for regulatory and transaction purposes.

Overview

Valuations are needed for share issues and transfers, foreign investment, ESOPs, mergers, financial reporting and disputes. The method depends on the purpose: discounted cash flow, comparable companies and transactions, or net asset value.

Different laws prescribe who may value and how: Registered Valuers under the Companies Act, the Income-tax Rules for tax purposes, and internationally accepted methods under FEMA pricing guidelines.

Who needs this service

Companies issuing or transferring shares
Startups raising capital
Companies receiving foreign investment
Businesses in mergers, demergers or disputes

Legal and regulatory framework

  • Companies Act, 2013: Section 247 (Registered Valuers)
  • Income-tax Rules: fair market value rules for shares
  • FEMA (Non-debt Instruments) Rules, 2019: pricing guidelines
  • ICAI Valuation Standards

Scope of services

Purpose-based valuation

  • Share issue and transfer valuation
  • FEMA pricing certificates
  • ESOP valuation

Transactions

  • Business valuation for acquisitions and mergers
  • Purchase price allocation support

Reporting

  • Valuation report with methods, assumptions and conclusion

How the engagement works

  1. PurposeLaw and standard applicable.
  2. InformationFinancials and projections.
  3. AnalysisValuation methods applied and reconciled.
  4. ReportSigned valuation report.

Documents typically required

Audited financialsBusiness projectionsShareholding patternDetails of the transaction

Key forms and due dates

ItemTimeline
ValidityValuations are dated; many laws require a report within a set period before the transaction

Indicative; subject to amendments and extensions notified by the authorities.

Deliverables

  • Valuation Report
  • Certificates for FEMA or tax purposes

The scope of each engagement is agreed in writing and depends on the nature, size and regulatory requirements of the entity.

Frequently asked questions

Which valuation method is used?

It depends on the purpose and the business: DCF for growing businesses, NAV for asset-heavy or holding companies, and market multiples where comparables exist. Often more than one method is used.

Can a Chartered Accountant issue a FEMA valuation certificate?

For unlisted shares, a Chartered Accountant, SEBI-registered merchant banker or practising cost accountant can certify fair value using an internationally accepted pricing methodology.

This page is for general information only and does not constitute professional advice or solicitation.