IBBI Amends CIRP Regulations on Fair Value and Valuation Process

The Insolvency and Bankruptcy Board of India (IBBI) has notified the IBBI (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2026, introducing key changes relating to valuation methodology and treatment of certain stakeholders in insolvency proceedings.

1. Revised Definition of ‘Fair Value’

The amendment substitutes the existing definition of ‘fair value’ under Regulation 2(hb). The revised definition aims to bring greater clarity and consistency in determining the fair value of assets during the corporate insolvency resolution process (CIRP).

2. Determination of Fair Value and Liquidation Value

The amendment also revises the manner of determination of fair value and liquidation value. These changes are intended to:

• Strengthen transparency and accuracy in asset valuation
• Ensure uniform valuation practices during CIRP
• Improve reliability of valuation inputs used by the committee of creditors and resolution professionals
• Align valuation practices with evolving regulatory and market expectations

The updated framework provides clearer guidance on how valuers and resolution professionals are to determine fair value and liquidation value during insolvency proceedings.

3. Treatment of Certain Real Estate Allottees

The amendment introduces provisions relating to the treatment of allottees in real estate projects who have not filed claims during the insolvency resolution process.

These provisions aim to clarify the handling of such cases within the CIRP framework and ensure that the interests of stakeholders are addressed in a structured and transparent manner.

4. Objective of the Amendments

The amendments seek to enhance procedural clarity, strengthen valuation standards, and address practical challenges encountered during insolvency resolution, particularly in real estate insolvency cases.

Overall, the revised regulations are intended to improve the efficiency, transparency, and effectiveness of the corporate insolvency resolution process.