IBBI Tightens Valuer Rules in Pre-Packaged Insolvency — What Resolution Professionals Need to Know

 The Insolvency and Bankruptcy Board of India (IBBI) has notified the Pre-Packaged Insolvency Resolution Process (Second Amendment) Regulations, 2026 vide notification dated 19th May 2026. The amendment comes into force on the date of publication in the Official Gazette and makes targeted but significant changes to how registered valuers are appointed and how valuations are determined in PPIRP proceedings.

Key regulation amended: Regulation 38 (Appointment of Registered Valuers) has been substituted in entirety. Regulation 39 (Valuation process) has also been amended to tighten language around coordinating valuers.

What changed in Regulation 38?

The revised Regulation 38 now mandates that the Resolution Professional (RP) appoint a set of registered valuers within three days of their own appointment to determine both the fair value and the liquidation value of the corporate debtor. The Committee of Creditors (CoC) retains the discretion to decide, in writing, to appoint two sets of valuers instead of one.

More significantly, the amendment introduces an expanded and explicit list of persons who cannot be appointed as registered valuers:

• A related party of the corporate debtor
• An auditor of the corporate debtor at any time during the five years preceding the pre-packaged insolvency commencement date
• A partner or director of the insolvency professional entity of which the RP is a partner or director
• A relative of the RP, or of any partner or director of the IP entity

This mirrors the conflict-of-interest framework that was already in place under CIRP, bringing greater parity and integrity to the PPIRP process as well.

What changed in Regulation 39?

The amendments to Regulation 39 refine the language around the valuation process itself:

• "Coordinating valuers" replaced with "the coordinating valuer" — signalling a single designated coordinator
• Fair value is now the estimate submitted by the coordinating valuer; where two sets are appointed, it is the average of the two coordinating valuers' estimates
• Liquidation value equals the aggregate of estimates per asset class; where two sets are appointed, it is the average of the two sets' estimates in each class

Why does this matter for RPs?

For Resolution Professionals, these changes have immediate operational implications. The three-day clock for valuer appointment starts ticking from the moment the RP is appointed — there is no room for delay. Due diligence on valuer eligibility must be conducted upfront, particularly given the expanded disqualification criteria now covering not just direct relationships but also those within the IP entity's network.

The tighter language on coordinating valuers also reduces ambiguity in how final valuation figures are arrived at, which should lead to cleaner, more defensible valuation reports in PPIRP proceedings.

Takeaway

This amendment is a step toward greater transparency and independence in the PPIRP process. As an RP, building a pre-screened panel of eligible registered valuers — with conflict-of-interest checks built in — is no longer optional best practice. It is essential from day one.