The Insolvency and Bankruptcy Board of India (IBBI) has proposed a uniform valuation format for bankrupt firms, marking a significant step towards standardizing the valuation process within the Insolvency and Bankruptcy Code (IBC) framework. The proposal, outlined in a discussion paper released on November 14, 2025, aims to address inconsistencies, enhance transparency, and improve the reliability of asset assessments during corporate resolutions. The IBBI is seeking stakeholder feedback on the proposed changes by December 10.
Currently, the IBC lacks a uniform valuation standard, leading to varied methodologies and assumptions by registered valuers, potentially causing delays and disputes. The proposed reforms target these challenges by introducing standardized valuation reports and documentation. This uniform format seeks to eliminate the diverse report formats that often lack crucial details on methodologies and assumptions, which can lead to confusion, litigation, and delays.
One of the key proposals is to harmonize the valuation standards used across different insolvency stages. Currently, the Corporate Insolvency Resolution Processes (CIRP) rely on "internationally accepted valuation standards," while liquidation processes follow the Companies (Registered Valuers and Valuation) Rules, 2017. The IBBI aims to replace these with a single, unified "valuation standard as specified by the Board".
Furthermore, the IBBI has proposed a revision to the definition of 'Fair Value' to capture the holistic "going concern" value of a business. The new definition would require valuers to consider the corporate debtor as a whole, including intangible assets like brand value, intellectual property, and goodwill, thereby capturing the true synergistic enterprise value, instead of focusing on the realisable value of individual assets. This transition from asset-specific valuation to a holistic enterprise valuation model is expected to enhance accuracy and narrow valuation gaps.
To reduce costs and expedite the process for smaller entities, the IBBI has proposed appointing only one registered valuer for companies with an annual turnover of up to ₹500 crore or those classified as MSMEs. However, the Committee of Creditors (CoC) can still opt for two valuers by recording its reasons. For larger companies requiring multiple valuers, the IBBI proposes a new role of a 'Coordinator Valuer'. This valuer would be responsible for integrating the separate valuations of assets (like land, machinery, and securities) into a single, comprehensive “aggregate fair value” of the company, ensuring a unified view of the business.
The proposed changes are expected to bring Indian practices in alignment with global standards, reduce disputes, and strengthen stakeholder confidence. By ensuring uniformity, transparency, and reliability across all insolvency processes, the IBBI seeks to create a valuation regime aligned with global best practices. The move is seen as a significant policy development that could enhance the accuracy, consistency, and credibility of valuations under the IBC.
