Key facts
- India's bankruptcy regulator has issued a circular with new valuation rules for companies in resolution under the Insolvency and Bankruptcy Code (IBC).
- The rules aim to standardize formats and documentation for company valuations to ensure fairer outcomes.
- The guidelines cover general documentation requirements, valuation report content, and specific parameters for valuing receivables.
- The circular follows a discussion paper released by the Insolvency and Bankruptcy Board of India (IBBI) in November 2025.
- The IBC has facilitated the resolution of 1,419 companies, recovering ₹4.32 lakh crore for creditors as of March.
India's bankruptcy regulator has introduced new valuation rules aimed at standardizing the process and ensuring fairer outcomes in insolvency cases. The circular, issued by the Insolvency and Bankruptcy Board of India (IBBI), mandates specific formats and documentation requirements for valuing companies undergoing resolution under the Insolvency and Bankruptcy Code (IBC).
The objective is to establish a scientific approach to valuing stressed firms, which significantly influences creditors' decisions on bid offers and revival plans, thereby minimizing the scope for arbitrary methods. This initiative follows a November 2025 discussion paper on valuation guidelines by the IBBI.
The new guidelines are divided into three parts. The first part outlines general requirements for documentation, including the minimum content of valuation reports and the duties of registered valuers. The second part details asset-specific formats for valuation reports, and the third part specifies dos and don'ts for coordinating valuers in determining the fair value of a stressed firm.