IBBI Notifies Guidelines for Conducting Valuation Under the Insolvency and Bankruptcy Code, 2016

 The Insolvency and Bankruptcy Board of India (IBBI) has issued the Guidelines for Conducting Valuation Under the Insolvency and Bankruptcy Code, 2016, vide Circular No. IBBI/RV/103/2026 dated 15th June 2026. The Guidelines are issued in exercise of powers conferred under Section 196 of the Code and are addressed to all Registered Valuers, Registered Valuer Entities, Registered Valuer Organisations, Insolvency Professionals, Insolvency Professional Entities, and Insolvency Professional Agencies.

Background and Legislative Basis

Valuation reports prepared under the Code form a critical element of any insolvency or liquidation process, underpinning consistency, professionalism, transparency, comparability, and trust in the determination of value. The amended provisions requiring a Board-notified format for valuation reports include sub-regulation (1A) of Regulation 35 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016; sub-regulation (8) of Regulation 35 of the IBBI (Liquidation Process) Regulations, 2016; clause (b) of sub-regulation (1) of Regulation 3 of the IBBI (Voluntary Liquidation Process) Regulations, 2017; sub-regulation (1A) of Regulation 39 of the IBBI (Pre-packaged Insolvency Resolution Process) Regulations, 2021; and sub-regulation (5) of Regulation 30 of the IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019.

The Guidelines, enclosed as Annexure I to the circular, come into force from the date of issue and apply to all valuations conducted under the Code thereafter.

Structure of the Guidelines

The Guidelines are divided into three parts.

Part I – General Content sets out documentation requirements to be maintained by the Registered Valuer, the minimum content of the valuation report, key parameters to be considered while valuing receivables, and the duties of Registered Valuers towards a designated Coordinating Valuer.

Part II – Asset-Specific Formats prescribes the format of the valuation report for three asset classes: Land and Building, Plant and Machinery, and Securities or Financial Assets.

Part III – Coordinating Valuer Guidelines sets out the framework for a Coordinating Valuer responsible for determining the Fair Value of the Corporate Debtor as a whole.

Documentation Requirements

The Registered Valuer is required to maintain a comprehensive written record of the valuation, including communications with the client, working papers, and supporting materials substantiating the conclusions reached. Documentation must clearly describe the valuation process, the scope of work performed, the basis of conclusions drawn, alternative methodologies considered, risks and biases identified, and the valuation quality control procedures applied.

Minimum Contents of the Valuation Report

The Guidelines prescribe twenty-three minimum content items for every valuation report, including the purpose and scope of work, details of the Registered Valuer and registration number, disclosure of conflicts of interest, the Valuation Report Identification Number (VRIN), sources of information, the basis and premise of value adopted, valuation standards followed, valuation approaches and methods applied, relevant discounts and premiums, significant assumptions and limiting conditions, and caveats, limitations, and disclaimers as prescribed under the IBBI (Use of Caveats, Limitations, and Disclaimers in Valuation Reports) Guidelines, 2020.

Notably, the VRIN generated from the IBBI website must be mentioned in the footer on the left side of every page of the report.

Valuation of Receivables

A dedicated set of parameters has been prescribed for valuing receivables, covering the nature of the receivable, credit risk profile and related-party status, ageing of receivables, legal enforceability and documentation, past recovery and servicing record, and macroeconomic and industry factors affecting recoverability.

Asset-Specific Formats

For each of the three asset classes, the Guidelines prescribe a standardised executive summary along with twenty-two detailed sections covering matters such as background information on the asset, sources of information, valuation approaches (market, income, and cost), sustainability and functional factors, special assumptions, and the rationale for the values arrived at. Each report must disclose Fair Value, Liquidation Value, Book Value, and, where the cost approach is adopted, Replacement Cost.

A notable common requirement across all three formats is that the Registered Valuer must provide details of meetings held with the Committee of Creditors to explain the valuation methodology, in line with Regulation 35(1)(b) of the CIRP Regulations.

Introduction of the Coordinating Valuer

A significant feature of the Guidelines is the introduction of a Coordinating Valuer, designated by the Insolvency Professional in consultation with the Committee of Creditors from among the Registered Valuers appointed for the relevant set of asset classes. The Coordinating Valuer is tasked with integrating the asset-class-level valuations of Land and Building, Plant and Machinery, and Securities or Financial Assets to arrive at a holistic Fair Value of the Corporate Debtor, taking into account business synergies and both tangible and intangible assets such as brand value, customer relationships, licences, and goodwill.

The Guidelines provide an indicative representation for this integration:

FV(CD) = Σ V(RV) + S

where FV(CD) is the Fair Value of the Corporate Debtor, V(RV) represents the values determined by individual Registered Valuers across asset classes, and S represents the synergistic value adjustment reflecting operational efficiencies, business synergies, market positioning, and future earning potential.

The Coordinating Valuer is required to maintain independence and objectivity, disclose conflicts of interest, meet with the Committee of Creditors to explain methodology before finalising estimates, and prepare a Coordinating Valuation Report along with an executive summary in the format specified at Annexure A to the Guidelines.

Conclusion

These Guidelines represent a structured move towards standardising valuation practice under the Code, addressing long-standing concerns around inconsistency and lack of documentation rigour in valuation reports submitted during CIRP, liquidation, and related processes. Registered Valuers, Insolvency Professionals, and Committees of Creditors will need to align their internal processes with these requirements with immediate effect, given that the Guidelines apply to all valuations conducted under the Code from the date of the circular.

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Disclaimer: This article is for informational purposes only and does not constitute legal or professional advice. Readers are advised to refer to the original circular and consult professional advisors before acting on the contents herein.