The aim is to put in place a scientific approach to the valuation of stressed firms-which significantly influences creditors’ considerations of bid offers and revival plans-and minimise the scope for arbitrary methods.
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The circular followed a November 2025 discussion paper on valuation guidelines by the Insolvency and Bankruptcy Board of India (IBBI).
The latest guidelines have three parts. The first part sets out general requirements regarding documentation to be maintained by the registered valuer, the minimum content of the valuation report, key parameters to be considered while valuing receivables and duties of registered valuers towards designated coordinating valuer.
The second part contains the asset-specific formats for the valuation report. The third and final part specifies dos and don’ts for coordinating valuer for the determination of the stressed firm’s fair value.
The documentation will constitute a comprehensive written record of the valuation and include relevant communications with the client, working papers and supporting materials that substantiate the conclusions reached, the regulator said.The registered valuer, it added, will ensure the documentation is maintained in a manner that clearly describes the valuation process and is sufficient to substantiate the final conclusions.
Receivables valuation
The valuer, the circular said, has to consider the stressed firm’s nature of receivable, credit risk profile, related party status, ageing of receivables, legal enforceability and documentation, past recovery and servicing record.
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In addition, the valuer should consider macroeconomic and industry factors, such as sector-specific default trends and economic conditions impacting the recoverability of receivables, and any other parameter relevant for valuation.
As of March, the ten-year-old IBC facilitated the resolution of 1,419 companies, fetching creditors ₹4.32 lakh crore, with recovery touching 30.6% of their admitted claims.