To revive the global investor confidence in India’s insolvency framework, the Insolvency and Bankruptcy Board of India (IBBI) has notified that the International Valuation Standards (IVS) will be applicable for all the valuations conducted under the insolvency and bankruptcy code (IBC). The IBBI’s circular said that these standards will come into force from April 1, and will apply to corporate insolvency resolution process (CIRP), liquidation, and personal guarantor bankruptcy proceedings.
The board said that one of the objectives of the IBC is to maximise the value of assets of an insolvent entity by facilitating a time-bound resolution process. A “fair” valuation serves as a critical input to evaluate resolution plans and facilitate informed decision-making by stakeholders such as potential bidders, committee of creditors (CoC), and authorities like National Company Law Tribunal (NCLT). “Therefore, transparent, objective, and credible valuation of assets of the corporate debtor is fundamental to the effective functioning of the insolvency framework,” the circular said.
While regions such as South Africa, Turkey, Dubai, Abu Dhabi, Bahrain, Romania and Philippines have adopted IVS as national standards, Australia and New Zealand have tweaked these standards to meet the local requirements.
Strengthening Stakeholder Trust
Sandeep Sehgal, partner (tax) at AKM Global said that the earlier framework was broadly aligned with the international standards, but it remained fragmented in its application. “This circular is particularly significant in the current context as global investor confidence in Indian valuation outcomes had shown some degree of caution in recent years, and this move is a step towards reinforcing the trust, strengthening stakeholder confidence, and making the Indian insolvency ecosystem more reliable, and globally comparable,” he said.
“IVS are inherently principle-based, developed through public consultation and guided by global experts. Robust valuations are pivotal in ascertaining enterprise value and implicitly help creditors arrive at an appropriate decision,” said Devendra Mehta, partner at PwC.
There are two valuation standards followed globally which includes IVS – developed by UK-based not-for-profit International Valuation Standards Council (IVSC) – and Red Book, issued by the Royal Institution of Chartered Surveyors (RICS).
Structural Reforms
As of early 2026, the IBBI has brought in structural reforms in the IBC’s valuation process. These reforms, detailed in a February 2026 notice and a November 2025 discussion paper, have modified the definition of “fair value” while intending to promote uniform disclosures, improved auditability, reduced disputes, and enhanced comparability across valuation reports.
Since February, the “fair value” of the insolvent entity has to represent both tangible and intangible assets along with their underlying synergies. Additionally, the insolvency board has proposed a standardised valuation report format that includes asset-specific templates for land & building, plant & machinery, securities, etc.
In November, the board had also proposed relaxation in the valuation norms for MSMEs. Under IBBI Regulation 35 of the CIRP Regulations, two independent registered valuers must be appointed to determine the fair value and liquidation value of the company undergoing insolvency proceedings. However, IBBI has proposed that a single valuer (per asset class) can be appointed when dealing with companies below a specified threshold.
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