IBBI Issues Draft Valuation Guidelines Under IBC for Public Feedback

Discussion Papers Dated 19.11.2025

1. Background

Following its earlier Discussion Paper on Strengthening the Valuation Process under the Insolvency and Bankruptcy Code, 2016 (IBC), the Insolvency and Bankruptcy Board of India (IBBI) has now issued draft guidelines for conducting valuations in insolvency proceedings.

The proposed framework aims to bring greater standardisation, transparency, and uniformity to valuation practices carried out by registered valuers during CIRP, liquidation, and other IBC processes.

2. Structure of the Draft Guidelines

1. Part I – General Requirements for Valuation

Part I lays down the foundational principles and procedural standards applicable to all valuations under the IBC.
It covers:

• Documentation Requirements – Registered valuers must maintain detailed documentation, including:

1. Engagement letters,
2. Working papers,
3. Evidence supporting assumptions,
4. Data sources, and
5. Justification for methodologies adopted.

• Minimum Contents of the Valuation Report – The draft guidelines prescribe mandatory components of the valuation report, such as:

1. 1. Scope and purpose of valuation,
   2. Methodologies adopted and rationale for selection,
   3. Key assumptions and limitations,
   4. Valuer credentials, independence declaration, and
   5. Summary of findings.

• Parameters for Valuing Receivables – Special emphasis is placed on valuation of receivables, requiring consideration of:

1. 1. Ageing analysis,
   2. Probability of recovery,
   3. Creditworthiness of debtors,
   4. Security or collateral available, and
   5. Historical collection trends.

2.2 Part II – Asset-Specific Formats for Valuation Reports

Part II provides standardised formats and structure for valuation reports based on the type of asset being valued.

These include:

• Land and Building – Detailed templates for physical verification, title checks, market analysis, replacement cost, and income approaches.
• Plant and Machinery – Formats covering technical specifications, capacity assessments, depreciation, obsolescence factors, and condition-based adjustments.
• Securities or Financial Assets – Templates for valuation of equity, debt instruments, hybrid securities, and other financial claims, incorporating market, income, and cost-based approaches.

These asset-specific formats aim to ensure consistency, comparability, and reliability across valuation reports prepared in IBC processes.

3. Public Consultation

IBBI has invited stakeholder comments on the draft guidelines.

Feedback may be submitted electronically within the prescribed timeline, enabling professionals, creditors, valuers, and market participants to contribute to refining the final framework.

4. Significance

The proposed guidelines are expected to:

• Improve quality and reliability of valuations,
• Reduce disputes among stakeholders,
• Enhance the credibility of the CIRP and liquidation processes, and
• Align valuation practices with global professional standards.

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