Valuation Advisory.

Our work in this practice

Valuation is the discipline of estimating the fair value of a business, asset, intangible right, or financial instrument under a defensible methodology, supported by transparent assumptions and reproducible analysis. The audience for any given valuation determines both methodology selection and certification requirements: a regulatory valuation under Rule 11UA addresses the Income Tax Department; an ESOP valuation addresses the company's auditors and the granting board; an M&A fairness opinion addresses the transaction parties; an Ind AS 113 valuation addresses the company's statutory auditors.

Rule 11UA under the Income Tax Rules, 1962 is the principal Indian regulatory framework for fair market value determination, applicable to share issuance by closely-held companies under Section 56(2)(viib) (where shares are issued at consideration exceeding FMV, the differential is taxed in the issuing company). The acceptable methodologies under Rule 11UA include Net Asset Value, DCF, and Comparable Company Multiple, with selection driven by company stage and underlying business characteristics. The valuation must be certified by a Chartered Accountant.

Rule 11UAA addresses the valuation of unquoted equity shares for purposes of Section 50CA (sale of unquoted shares below FMV triggers deemed income), and for Section 56(2)(x) (receipt of shares for inadequate consideration is taxable in the recipient's hands). The framework provides defined methodologies (typically Net Asset Value, with DCF and comparable approaches in specified scenarios) and requires Chartered Accountant certification.

ESOP valuation under Black-Scholes or Binomial Option Pricing methodologies is required for Ind AS 102 accounting expense recognition, Section 17(2)(vi) perquisite tax computation at exercise, and Section 49(2AB) cost basis determination at eventual sale. The Black-Scholes inputs include spot price, exercise price, expected term, volatility of comparable companies, risk-free rate, and expected dividend yield.

M&A Discounted Cash Flow valuations are the standard methodology for going-concern acquisitions. Our DCF practice covers explicit period forecast (typically 5 to 10 years), terminal value computation (Gordon Growth or Exit Multiple), Weighted Average Cost of Capital construction (CAPM for cost of equity, after-tax cost of debt for debt portions), sensitivity analysis around key assumptions, and scenario analysis. DCF is typically triangulated against Comparable Company Analysis and Precedent Transactions methodologies.

IBC valuations under the IBBI framework are mandatory for the Corporate Insolvency Resolution Process and the Liquidation process. IBC valuations cover Fair Value (going-concern basis) and Liquidation Value (distressed sale), with two independent IBBI Registered Valuers required for each asset class (Securities and Financial Assets, Plant and Machinery, Land and Building). Our practice provides valuations through our panel of IBBI Registered Valuers.

Ind AS 113 (Fair Value Measurement) valuations are required for financial reporting fair value disclosures, impairment testing under Ind AS 36, business combination accounting under Ind AS 103 (including Purchase Price Allocation), and financial instrument accounting under Ind AS 109. Fairness opinions are issued for transactions involving related parties, minority shareholder protections, NCLT-supervised schemes, and other contexts requiring independent assessment of fair treatment. Purchase Price Allocation under Ind AS 103 covers post-business-combination allocation of consideration to acquired identifiable assets and liabilities, recognition of goodwill, and supporting valuations of intangibles.

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