Registered valuer
- A valuation report by a registered valuer is at the heart of the recent controversy surrounding a Rs 4,000 crore share allotment decision by PNB Housing Finance.
- A registered valuer is an individual or entity which is registered with the Insolvency and Bankruptcy Board of India (IBIBI) as a valuer in accordance with the Companies (Registered Valuers and Valuation) Rules, 2017.
- Under Section 458 of the Companies Act, IBBI has been specified as the authority by the central government.
- The concept of registered valuer was introduced in the Companies Act in 2017.
- It is to regulate the valuation of assets and liabilities linked to a company and to standardise the valuation procedure in line with global valuation standards.
Who can become a registered valuer?
An individual, who has
- Specified qualification and experience enrolled as a valuer member with a registered valuers organisation (RVO).
- Completed the educational course conducted by the RVO, and
- Passed the examination of the relevant asset class, conducted by IBBI.
- As of March 31, 2021, there were 3,967 registered valuers in the country and only 40 of them are registered entities.
Assets that registered valuer undertake valuation:
- Land and building
- Plant and machinery and
- Securities and financial assets.
Valuation report comprises:
- As per the Companies (Registered Valuers and Valuation) Rules, 2017, the valuer should, in his/its report, state 11 key aspects including,
- Disclosure of the valuer’s conflict of interest
- Purpose of valuation
- Sources of information
- Procedures adopted in carrying out the valuation
- Valuation methodology
- Major factors that influenced the valuation.