Creditors realised only about ₹3.99 trillion against ₹12.31 trillion of admitted claims under CIRP — a haircut of roughly 67%. Almost every rupee of that gap is decided by two numbers a registered valuer puts on paper in the first 47 days of the process.
If your company is heading into insolvency, or you are a resolution applicant sizing up a distressed asset, valuation for IBC is not a compliance formality. It sets the floor for what creditors will accept, the ceiling for what a resolution applicant needs to bid, and the reference point the NCLT uses when a plan is challenged.
What Valuation for IBC Actually Means
Under the Insolvency and Bankruptcy Code, 2016, the resolution professional must have two values determined for the corporate debtor: fair value and liquidation value. These are defined in Regulation 2 of the CIRP Regulations, and they answer very different questions.
Fair value asks: what would the business fetch on the insolvency commencement date between a willing buyer and a willing seller, in an arm’s length transaction, after proper marketing, with both parties acting knowledgeably and without compulsion? Liquidation value asks the opposite: what would the assets realise if the company were sold off piecemeal on the same date, in a distressed sale, with no time to market?
The gap between the two is the value of the enterprise as a going concern — and that gap is exactly what a resolution plan is meant to preserve. This is why IBC valuation work sits closer to business valuation than to a mechanical asset count.
Why Liquidation Value Is the Floor, Not the Target
Section 30(2) of the Code requires a resolution plan to pay operational creditors, and dissenting financial creditors, at least what they would have received in a liquidation. Liquidation value therefore operates as a statutory minimum. Promoters often misread this as the benchmark. It is not — it is the worst acceptable outcome, and a well-run process should land materially above it.
Who Can Perform Valuation for IBC
Only a registered valuer enrolled with a Registered Valuer Organisation and registered with the Insolvency and Bankruptcy Board of India may value assets under the Code. Registration is asset-class specific under the Companies (Registered Valuers and Valuation) Rules, 2017: Land & Building; Plant & Machinery; and Securities or Financial Assets.
That means a single valuer cannot sign off on an entire manufacturing company. A steel plant with freehold land, imported machinery and a brand portfolio needs a Land & Building valuer, a Plant & Machinery valuer, a Securities or Financial Assets valuer, and — increasingly — specialist input on intangible assets such as trademarks, technical know-how and customer contracts.
The same asset-class discipline appears elsewhere in Indian law, including valuation under the Companies Act, 2013, so promoters who have been through a Section 62 rights issue or a merger will find the framework familiar.
What Changed in 2026: IBBI’s Redefined Fair Value
On 25 February 2026, IBBI notified the CIRP (Amendment) Regulations, 2026, and this is the single most important development in valuation for IBC in years.
The amendment rewrote the definition of fair value to state expressly that the estimated realisable value of the corporate debtor must be computed after taking into account all assets — including tangible and intangible assets, along with their underlying synergies. Before this, valuers frequently produced a sum-of-parts figure that ignored brand equity, licences, distribution networks and the value created by assets working together. Those numbers systematically understated what a going concern was worth, and creditors bore the loss.
Regulation 27 was also amended: the resolution professional must now appoint two sets of registered valuers within seven days of appointment, but not later than the forty-seventh day from the insolvency commencement date. Each set comprises one registered valuer per asset class, with one designated as the coordinating valuer responsible for pulling the asset-level numbers into a single enterprise fair value.
How Fair Value and Liquidation Value Are Computed
The 2026 amendment prescribes a sequence that promoters and creditors should know in detail, because deviations from it are grounds for challenge.
- Methodology meeting. Before any estimates are computed, the resolution professional convenes a meeting where the valuers explain their methodology to the Committee of Creditors. The CoC hears the approach before it hears the number.
- Physical verification. Each registered valuer must physically verify inventory and fixed assets before submitting a report. Desktop valuations are not compliant.
- Coordination. Each coordinating valuer computes the fair value of the corporate debtor from the asset-level values within their set, factoring in underlying synergies.
- Third set, if needed. If the two estimates of fair value or liquidation value differ by 25% or more, or if the CoC records written reasons, the resolution professional may appoint a third set of valuers.
- Averaging. Fair value is the average of the two closest estimates submitted by the coordinating valuers. Liquidation value is the average of the two closest estimates within each asset class.
Regulation 35(1A) additionally requires valuers to prepare reports and maintain documentation in the format IBBI notifies by circular — a meaningful tightening of the audit trail.
Where Else the Code Requires Valuation
Valuation under the IBC does not stop at CIRP. Under the Liquidation Process Regulations, the liquidator relies on the fair value and liquidation value already determined during CIRP; fresh valuation is required only where those are unavailable or where the liquidator proposes a going-concern sale of the corporate debtor or its business.
Valuation also drives avoidance applications. To establish an undervalued transaction under Section 45 or a preferential transaction under Section 43, the resolution professional needs a defensible retrospective value for the asset transferred. Promoters frequently discover, too late, that a related-party transfer executed two years before admission is now being tested against an independent valuation — one more reason to keep transaction advisory documentation clean well before distress sets in.
Four Mistakes Founders and Promoters Make
Treating the valuer as adversarial. The valuer is not the creditor’s agent. Withholding order books, capacity utilisation data or customer contracts only removes evidence that would have supported a higher going-concern value.
Ignoring intangibles. Post-February 2026, synergies and intangible assets must be reflected in fair value. If the report is silent on your brand, approvals or technology, that is a gap worth raising with the resolution professional in writing.
Missing the 47-day window. Valuation inputs are collected early and fast. Data that arrives in month four rarely changes the number that anchors the entire process.
Waiting for admission to get a baseline. Promoters who already know their enterprise value negotiate settlements, one-time settlements and pre-pack options from a position of information. Those who don’t, negotiate blind. Our restructuring services team routinely sees the difference this makes.
Get a Defensible Number Before Someone Else Sets It
Valuation for IBC rewards preparation. Whether you are a promoter facing a Section 7 petition, a lender assessing a resolution plan, or a resolution applicant pricing a distressed acquisition, the quality of the underlying valuation determines the outcome far more than the arguments made later at the NCLT.
FinVal Research & Consultancy is an IBBI Registered Valuer firm empanelled with leading banks and experienced in fair value and liquidation value engagements under the Code. Start with our free business valuation tool for an instant indicative estimate, or book a free consultation with our valuation team to discuss your situation in confidence.