Business Valuation Services in India: What to Expect

A valuation report is a document that has to survive somebody else's scrutiny, so what matters is the purpose it was written for, the evidence behind it and who signed it.

Last verified: 5 September 2026 · Applies to: engagements commissioned from 1 April 2026

Contents

• Start with the purpose, not the number
• Trigger events and the report each one needs
• What is actually in a valuation report
• The stages, and what you will be asked for
• What makes a report survive scrutiny
• How valuation engagements are priced
• Red flags in a cheap report
• Frequently asked questions
• How BVACA can help

Start with the purpose, not the number

The most common way a valuation engagement goes wrong is that it begins with the wrong question. "What is my company worth?" has no single answer in Indian law. It has several, and which one you need depends entirely on who is going to read the report.

A report prepared for a preferential allotment answers to the Registrar of Companies and to section 247 of the Companies Act, 2013. A report prepared for a foreign investor answers to an authorised dealer bank and to Rule 21 of the FEMA Non-Debt Instruments Rules, 2019. A working prepared for a share transfer answers to an assessing officer and to Rule 57 of the Income-tax Rules, 2026. A report prepared for an ESOP exercise answers to Rule 15 and must be signed by a SEBI Category I Merchant Banker specifically.

These are different documents with different permitted methods and different signatories. Commissioning "a valuation" without settling the purpose first is the reason reports get rejected, re-done and paid for twice. Our note on which statute requires which valuer's signature sets out the full map.

Trigger events and the report each one needs

Illustrative example. A company raises ₹15 crore, of which ₹9 crore comes from an overseas fund and ₹6 crore from resident investors, and refreshes its ESOP pool at the same board meeting. That is one transaction and four documents: a section 247 registered valuer report, a Rule 21 FEMA pricing certificate establishing the floor for the foreign tranche, a Rule 15 merchant banker certificate for the ESOP perquisite FMV, and a Rule 57 working if any existing shareholder sells unquoted equity shares alongside the round. Figures are invented for illustration.

We cover the cross-border side in FEMA pricing certificates for cross-border deals and the employee side in ESOP perquisite valuation and the 180-day certificate.

What is actually in a valuation report

A report that will be read by a regulator, an investor's diligence team or a tribunal contains, at minimum:

• Purpose and intended user. The statute or transaction it was prepared for, and a statement that it should not be relied on for anything else. A report with no stated purpose is worth very little.
• Valuation date, and the basis on which it was fixed.
• Scope, sources and limitations. What was reviewed, what was relied on without independent verification, and what was excluded.
• Company background and financial analysis. Enough context that a reader who has never met the company can follow the reasoning, plus historical performance, normalisation adjustments and the treatment of surplus and non-operating items.
• Method selection and why. The method chosen, the methods rejected, and the reason for each.
• The workings. For a DCF, the forecast, the discount rate build-up, the terminal value assumption and the sensitivity analysis. For a formula-based working such as Rule 57, each variable traced to a source document.
• Cross-check. A second approach, even if it is not the primary method, and an explanation of any divergence.
• Conclusion, expressed as the value or price per share and, where relevant, as the floor or ceiling that applies.
• Signature and credentials. The individual's registration number and asset class, and the date.

If you want the mechanics of the models underneath all this, start with a primer on DCF, comparables and net asset value.

The stages, and what you will be asked for

An engagement runs in four stages, and the timetable is set almost entirely by how quickly the company can produce documents.

Stage 1, scoping. Purpose, valuation date, statute, signatory and deliverables are fixed in writing. This is short but it is where the money is saved, because a wrongly scoped engagement is discovered at the end.

Stage 2, information gathering. The longest stage, and the one that is in your control. Expect a request list covering:

• Audited financial statements, usually the last three financial years, plus the latest management accounts
• The current shareholding pattern and cap table, including options outstanding
• Memorandum and articles of association, and any shareholders agreement
• Details of every class of shares, with conversion, preference and anti-dilution terms
• A business plan or financial forecast, with the assumptions behind it, for any income-approach method
• Details of immovable property, including title documents and stamp duty valuations
• Details of investments in other companies, which each need their own valuation
• Loan agreements, guarantees, charges and contingent liabilities
• Details of related party transactions
• Pending litigation, tax demands and regulatory proceedings
• Prior valuation reports and details of recent share transactions in the company

Stage 3, analysis and draft. Normalisation, method selection, modelling, cross-check, and a draft for management to correct factual matters. Management corrects facts; it does not negotiate the conclusion.

Stage 4, issue. Signed report, with the signatory's registration details, delivered against the transaction timetable.

What can be said without a number: stages 1, 3 and 4 are broadly predictable, while stage 2 varies from days to weeks depending on whether the audited accounts are finalised, whether stamp duty valuations for property are already in hand, and whether unquoted investments need separate valuations of their own. Companies that start collecting documents when the term sheet is signed, rather than when the valuer is appointed, routinely save a fortnight.

What makes a report survive scrutiny

Four different readers stress a report in four different ways.

An assessing officer looks first at whether the correct rule was applied and whether the arithmetic can be traced to source documents. For unquoted equity shares that means the Rule 57 formula that replaced Rule 11UA, each variable tied to the audited balance sheet, the stamp duty valuation and the valuation of each unquoted investment. A report citing a repealed rule invites the whole file to be reopened.

A Registrar checks the signatory: registration status, asset class, and whether the individual who signed is the registered person. The number is rarely the issue at this stage.

An investor's diligence team tests the assumptions. They will compare the forecast in the valuation with the forecast in the pitch deck and with the historical accounts, and any divergence that cannot be explained damages more than the valuation.

A tribunal reads for internal consistency and independence: whether the method was chosen before the answer, whether contradictory evidence was addressed, and whether the valuer's reasoning is followed rather than asserted.

The common thread is that a defensible report shows its work and states its limits. A report that reaches a confident number with no sensitivity analysis and no cross-check is the easiest kind to attack.

How valuation engagements are priced

Valuation fees are driven by scope, not by the size of the number produced. The drivers are:

For BVACA's current fee bands, We quote against a written scope after a short scoping call, so the fee is fixed before work starts rather than estimated against an unknown.

Red flags in a cheap report

These are the defects we see most often when a report comes to us for a second opinion:

1. It cites Rule 11UA for a transaction on or after 1 April 2026. The rule was replaced by Rule 57 of the Income-tax Rules, 2026.
2. It refers to section 56(2)(viib) or angel tax. That section was omitted by the Finance (No.2) Act, 2024 from AY 2025-26 and is not re-enacted under the Income-tax Act, 2025.
3. The purpose is not stated, so the report cannot be matched to a statute, and every reader has to guess which standard it was written to.
4. The signatory's registration number and asset class are missing, or the asset class does not cover what was valued.
5. An ESOP FMV certificate is signed by someone other than a SEBI Category I Merchant Banker, or is more than 180 days old at the exercise date.
6. A DCF forecast with no link to history. Revenue trebling in year two, with no explanation of what changed, is the first thing a diligence team circles.
7. One method, no cross-check, no sensitivity analysis. A single point estimate with no range invites the reader to construct their own.
8. Old and new section numbers mixed inconsistently, which tells a reviewer the template was not updated after 1 April 2026.

Any one of these can be corrected. The cost of correcting them after a filing, an allotment or an assessment notice is a different order of magnitude from the cost of getting the report right once.

Frequently asked questions

How much does a business valuation cost in India?

It depends on scope rather than on the value of the business: the number of statutory deliverables, the method required, the asset classes involved, group complexity, the state of the records and the timetable. We quote against a written scope after a scoping call rather than estimating against an unknown.

How long does a valuation report take?

The analysis and drafting are broadly predictable; the variable is how quickly the company can produce audited accounts, stamp duty valuations for property, the cap table and details of unquoted investments. Companies that begin assembling the request list when the term sheet is signed rather than when the valuer is appointed usually save the most time.

What documents do I need to give the valuer?

Three years of audited accounts and current management accounts, the cap table and shareholding pattern, memorandum and articles, the shareholders agreement, terms of each class of shares, the business plan and forecast, immovable property details with stamp duty valuations, details of investments in other companies, loan and charge details, related party transactions, pending litigation and tax demands, and any prior valuation reports.

Can one valuation report be used for multiple purposes?

Rarely. FEMA requires an internationally accepted pricing methodology, income-tax Rule 57 prescribes a formula for unquoted equity shares, Rule 15 requires a merchant banker for ESOPs and section 247 requires an IBBI Registered Valuer. One engagement can produce several deliverables, but each states its own purpose and basis on its face.

Is a valuation report mandatory for a private limited company?

Not routinely, but it is mandatory at specific trigger points: preferential allotment and private placement, buy-back, merger or demerger and non-cash transactions under section 192 of the Companies Act, share issues and transfers involving non-residents under FEMA Rule 21, ESOP exercises in unlisted companies under Rule 15, and insolvency proceedings under IBC Regulations 27 and 35.

Do you provide valuations outside Panchkula and Chandigarh?

Yes. Valuation work is document-driven and is routinely delivered remotely, with a site visit where an asset class requires one. BVACA works with clients across the Tricity, Punjab, Haryana and Delhi NCR, pan-India and with non-resident clients.

How BVACA can help

Bachhal Vijender & Associates holds IBBI Registered Valuer credentials within the practice and prepares valuations for Companies Act, FEMA, income-tax, transaction and insolvency purposes from our office in Panchkula. We scope every engagement to a stated purpose and signatory before work starts, issue each statutory deliverable as its own report rather than stretching one certificate across several regulators, and document the reasoning so the file still answers questions three years later. Where a mandate needs a signatory outside our registration, such as a SEBI Category I Merchant Banker certificate for an ESOP exercise, we say so at the outset and sequence the appointments against your board and filing dates.

If you have a transaction in view, a short scoping call will establish which reports you need, who has to sign each one and what it will cost, before anything is commissioned. See our valuation services and IBBI Registered Valuer work.

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Author box: CA Vijender Singh Bachhal, Managing Partner, Bachhal Vijender & Associates (FRN 028355N), Panchkula. About the firm

Disclaimer: This article is general information current as at 5 September 2026, not advice for a specific situation. Tax and corporate law in India changed materially on 1 April 2026; verify the position before acting. Illustrative examples are not client matters.