SEBI Updates Valuer Norms Under SBEB Regulations

Notification F. No. SEBI/LAD-NRO/GN/2025/284, Dated: 03.12.2025

1. Introduction

The Securities and Exchange Board of India (SEBI) has introduced key amendments to the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations (SBEB Regulations), significantly revising the definition and eligibility criteria of valuers. One of the major changes includes replacing the role of a merchant banker with that of an independent registered valuer, aligning valuation requirements with enhanced transparency and governance standards.

2. Updated Definition of Valuer

Under the revised provisions, SEBI has broadened and standardised the definition of a “valuer” to ensure greater independence, professional competence, and regulatory oversight. Instead of relying on merchant bankers for valuation exercises, companies will now be required to engage a registered valuer, recognised under the Companies Act, 2013. This shift aims to bring consistency in valuation practices and strengthen the reliability of valuation reports used for employee benefit schemes.

3. Replacement of Merchant Banker With Independent Registered Valuer

Previously, merchant bankers were mandated for valuations related to employee stock option schemes (ESOPs) and other share-linked benefits. With the amendment, SEBI has replaced merchant bankers with independent registered valuers, ensuring a more specialised and unbiased valuation process. Registered valuers, regulated by the Insolvency and Bankruptcy Board of India (IBBI), offer deeper domain-specific expertise, making valuations more credible and compliant.

4. Impact on Companies and Employee Benefit Schemes

The move is expected to enhance governance, as companies implementing ESOPs, RSUs, SARs, and sweat equity schemes will now follow a more robust valuation framework. This change will impact listed entities, valuation professionals, and compliance officers who must update their internal processes and documentation in line with the new regulations. Improved valuation accuracy is also likely to strengthen investor confidence and reduce discrepancies in share-based compensation reporting.

5. Conclusion

SEBI’s revision of the valuer definition and the shift from merchant bankers to independent registered valuers marks an important step toward strengthening transparency and accountability under the SBEB Regulations. By aligning the framework with the Companies Act valuation ecosystem, SEBI aims to ensure reliable, fair, and standardised valuation practices across the corporate landscape. Companies must now adapt to these changes to ensure timely and seamless regulatory compliance.

Click Here To Read The Full Notification