{"id":2730,"date":"2025-02-05T10:00:25","date_gmt":"2025-02-05T04:30:25","guid":{"rendered":"https:\/\/valugenius.in\/blog\/?p=2730"},"modified":"2025-02-20T13:16:14","modified_gmt":"2025-02-20T07:46:14","slug":"mandatory-valuations-under-sebi-regulations-requirement-guide","status":"publish","type":"post","link":"https:\/\/valugenius.in\/blog\/mandatory-valuations-under-sebi-regulations-requirement-guide\/","title":{"rendered":"Mandatory Valuations Under SEBI Regulations &#038; Requirement"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><p>[vc_row][vc_column][vc_column_text]<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/valugenius.in\/blog\/mandatory-valuations-under-sebi-regulations-requirement-guide\/#Mandatory_Valuations_Under_SEBI_Regulations_%E2%80%93_Requirement_Guide\" >Mandatory Valuations Under SEBI Regulations &#8211; Requirement Guide<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/valugenius.in\/blog\/mandatory-valuations-under-sebi-regulations-requirement-guide\/#1_Schemes_of_Arrangement\" >1. Schemes of Arrangement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/valugenius.in\/blog\/mandatory-valuations-under-sebi-regulations-requirement-guide\/#2_Valuation_for_Real_Estate_and_Infrastructure_Trusts\" >2. Valuation for Real Estate and Infrastructure Trusts<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/valugenius.in\/blog\/mandatory-valuations-under-sebi-regulations-requirement-guide\/#3_Delisting_of_Equity_Shares\" >3. Delisting of Equity Shares<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/valugenius.in\/blog\/mandatory-valuations-under-sebi-regulations-requirement-guide\/#4_Valuation_for_Open_Offers\" >4. Valuation for Open Offers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/valugenius.in\/blog\/mandatory-valuations-under-sebi-regulations-requirement-guide\/#5_Employee_Stock_Options_and_Sweat_Equity_Valuation\" >5. Employee Stock Options and Sweat Equity Valuation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/valugenius.in\/blog\/mandatory-valuations-under-sebi-regulations-requirement-guide\/#6_Alternative_Investment_Funds_AIFs\" >6. Alternative Investment Funds (AIFs)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/valugenius.in\/blog\/mandatory-valuations-under-sebi-regulations-requirement-guide\/#7_Valuation_Under_Insolvency_Bankruptcy_Code\" >7. Valuation Under Insolvency &amp; Bankruptcy Code<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/valugenius.in\/blog\/mandatory-valuations-under-sebi-regulations-requirement-guide\/#8_Mergers_and_Amalgamations\" >8. Mergers and Amalgamations<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/valugenius.in\/blog\/mandatory-valuations-under-sebi-regulations-requirement-guide\/#Valuation_Standards_and_Qualifications\" >Valuation Standards and Qualifications<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/valugenius.in\/blog\/mandatory-valuations-under-sebi-regulations-requirement-guide\/#Why_Choose_ValuGenius\" >Why Choose ValuGenius?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"Mandatory_Valuations_Under_SEBI_Regulations_%E2%80%93_Requirement_Guide\"><\/span><b>Mandatory Valuations Under SEBI Regulations &#8211; Requirement Guide<\/b><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><span style=\"font-weight: 400;\">Valuation is a cornerstone in maintaining transparency, fairness, and compliance in financial transactions, particularly those governed by <\/span>SEBI regulations<span style=\"font-weight: 400;\">. Registered Valuers play a critical role in conducting valuations for listed companies to ensure compliance with regulatory mandates. <strong>Below, we explore scenarios where SEBI explicitly requires valuations by a Registered Valuer:<\/strong><\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2><span class=\"ez-toc-section\" id=\"1_Schemes_of_Arrangement\"><\/span>1. Schemes of Arrangement<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Regulated by <\/span>SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Regulation 37)<span style=\"font-weight: 400;\">, valuations are mandatory for mergers, demergers, or amalgamations involving listed companies.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Requirement<\/b><span style=\"font-weight: 400;\">: Valuation of securities or <\/span>swap ratio<span style=\"font-weight: 400;\"> to ensure equitable transactions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Valuer<\/b><span style=\"font-weight: 400;\">: A Registered Valuer provides the report to justify the <\/span>Equity Share Swap Ratio<span style=\"font-weight: 400;\"> and ensures fairness.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Additional Requirement<\/b><span style=\"font-weight: 400;\">: A fairness opinion from a SEBI-registered Merchant Banker is also mandatory.<\/span><\/li>\n<\/ul>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_single_image image=&#8221;2748&#8243; img_size=&#8221;full&#8221; alignment=&#8221;center&#8221; style=&#8221;vc_box_shadow_border&#8221;][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2><span class=\"ez-toc-section\" id=\"2_Valuation_for_Real_Estate_and_Infrastructure_Trusts\"><\/span>2. Valuation for Real Estate and Infrastructure Trusts<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">SEBI mandates valuations under its <\/span><b>REITs<\/b><span style=\"font-weight: 400;\"> and <\/span><b>InvITs Regulations, 2014<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Requirement<\/b><span style=\"font-weight: 400;\">: Initial valuation during listing, semi-annual valuations, and valuations for related-party transactions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Valuer<\/b><span style=\"font-weight: 400;\">: A Registered Valuer under the <\/span><b>Companies Act, 2013<\/b><span style=\"font-weight: 400;\"> or SEBI\u2019s guidelines must perform these assessments.<\/span><\/li>\n<\/ul>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2><span class=\"ez-toc-section\" id=\"3_Delisting_of_Equity_Shares\"><\/span>3. Delisting of Equity Shares<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;1\/2&#8243;][vc_column_text]<span style=\"font-weight: 400;\">Under the <\/span><b>SEBI (Delisting of Equity Shares) Regulations, 2021<\/b><span style=\"font-weight: 400;\">, valuations ensure fairness in pricing during the delisting process.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Requirement<\/b><span style=\"font-weight: 400;\">: Determination of floor price and exit price based on SEBI\u2019s pricing framework.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Valuer<\/b><span style=\"font-weight: 400;\">: Independent valuation by a SEBI-registered Valuer is mandatory to maintain compliance.<\/span><\/li>\n<\/ul>\n<p>[\/vc_column_text][\/vc_column][vc_column width=&#8221;1\/2&#8243;][vc_single_image image=&#8221;2751&#8243; img_size=&#8221;large&#8221; alignment=&#8221;center&#8221; style=&#8221;vc_box_shadow_border&#8221;][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2><span class=\"ez-toc-section\" id=\"4_Valuation_for_Open_Offers\"><\/span>4. Valuation for Open Offers<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The <\/span><b>SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011<\/b><span style=\"font-weight: 400;\"> govern this.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Requirement<\/b><span style=\"font-weight: 400;\">: Determine fair value for shares of target companies with infrequent trading.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Valuer<\/b><span style=\"font-weight: 400;\">: A SEBI-recognized Registered Valuer ensures the fair pricing of shares in alignment with regulations.<\/span><\/li>\n<\/ul>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2><span class=\"ez-toc-section\" id=\"5_Employee_Stock_Options_and_Sweat_Equity_Valuation\"><\/span>5. Employee Stock Options and Sweat Equity Valuation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">SEBI mandates valuations for ESOPs and <\/span><b>Sweat Equity Shares<\/b><span style=\"font-weight: 400;\"> under the <\/span><b>SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Requirement<\/b><span style=\"font-weight: 400;\">: Valuation of equity instruments or shares before issuance.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Valuer<\/b><span style=\"font-weight: 400;\">: <a href=\"https:\/\/valugenius.in\/Our-Team.html\" target=\"_blank\" rel=\"noopener\">Certified Registered Valuers<\/a> must ensure compliance with SEBI standards.<\/span><\/li>\n<\/ul>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2><span class=\"ez-toc-section\" id=\"6_Alternative_Investment_Funds_AIFs\"><\/span>6. Alternative Investment Funds (AIFs)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Valuation requirements under <\/span><b>SEBI (Alternative Investment Funds) Regulations, 2012<\/b><span style=\"font-weight: 400;\"> aim to protect investor interests.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Requirement<\/b><span style=\"font-weight: 400;\">: Periodic valuations of portfolio investments to reflect their <\/span><b>Equity Valuation<\/b><span style=\"font-weight: 400;\"> accurately.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Valuer<\/b><span style=\"font-weight: 400;\">: Registered Valuers ensure adherence to valuation standards.<\/span><\/li>\n<\/ul>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2><span class=\"ez-toc-section\" id=\"7_Valuation_Under_Insolvency_Bankruptcy_Code\"><\/span>7. Valuation Under Insolvency &amp; Bankruptcy Code<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;1\/2&#8243;][vc_single_image image=&#8221;2754&#8243; img_size=&#8221;large&#8221; alignment=&#8221;center&#8221; style=&#8221;vc_box_shadow_border&#8221;][\/vc_column][vc_column width=&#8221;1\/2&#8243;][vc_column_text]<span style=\"font-weight: 400;\">SEBI guidelines extend to companies undergoing insolvency resolution.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Requirement<\/b><span style=\"font-weight: 400;\">: Determination of fair and liquidation values under the <\/span><a href=\"https:\/\/valugenius.in\/Valuation-Under-Insolvency.html\" target=\"_blank\" rel=\"noopener\">Insolvency and Bankruptcy Code<\/a><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Valuer<\/b><span style=\"font-weight: 400;\">: Registered Valuers appointed under the IBBI framework are mandatory.<\/span><\/li>\n<\/ul>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2><span class=\"ez-toc-section\" id=\"8_Mergers_and_Amalgamations\"><\/span>8. Mergers and Amalgamations<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">SEBI circulars govern valuations for corporate actions such as mergers and amalgamations.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Requirement<\/b><span style=\"font-weight: 400;\">: Valuation reports are essential for shareholder and regulatory approvals.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Valuer<\/b><span style=\"font-weight: 400;\">: SEBI requires Registered Valuers to justify the <\/span><a href=\"https:\/\/valugenius.in\/Mergers-Valuation.html\" target=\"_blank\" rel=\"noopener\">valuation of mergers and acquisitions<\/a><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Valuation_Standards_and_Qualifications\"><\/span>Valuation Standards and Qualifications<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">SEBI mandates compliance with ICAI Valuation Standards or internationally accepted standards under the Companies (Registered Valuers and Valuation) Rules, 2017. The Registered Valuer must be certified by the IBBI and appointed under the Companies Act, 2013.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Why_Choose_ValuGenius\"><\/span>Why Choose ValuGenius?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;1\/2&#8243;][vc_column_text]<span style=\"font-weight: 400;\">At ValuGenius Advisor LLP &#8211; the <\/span><a href=\"https:\/\/cajdshah.com\/\" target=\"_blank\" rel=\"noopener\">Top valuation firm in Mumbai<\/a><b>,<\/b><span style=\"font-weight: 400;\"> we specialize in delivering exceptional <\/span><a href=\"https:\/\/valugenius.in\/Services.html\" target=\"_blank\" rel=\"noopener\">valuation services<\/a><span style=\"font-weight: 400;\"> for businesses and transactions governed by SEBI regulations. With a team of experienced <\/span><a href=\"https:\/\/cajdshah.com\/top-ca-in-mumbai.html\" target=\"_blank\" rel=\"noopener\">chartered accountants in Borivali<\/a><span style=\"font-weight: 400;\">, we ensure transparency, compliance, and reliability.<\/span>[\/vc_column_text][\/vc_column][vc_column width=&#8221;1\/2&#8243;][vc_single_image image=&#8221;2757&#8243; img_size=&#8221;full&#8221; alignment=&#8221;center&#8221; style=&#8221;vc_box_shadow_border&#8221;][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column][vc_column_text] Mandatory Valuations Under SEBI Regulations &#8211; Requirement Guide Valuation is a cornerstone in maintaining transparency, fairness, and compliance in financial transactions, particularly those governed by SEBI regulations. Registered Valuers play a critical role in conducting valuations for listed companies to ensure compliance with regulatory mandates. Below, we explore scenarios where SEBI explicitly requires valuations [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":2750,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47,17,46],"tags":[],"class_list":["post-2730","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-valuation","category-consulting","category-knowledge-base"],"_links":{"self":[{"href":"https:\/\/valugenius.in\/blog\/wp-json\/wp\/v2\/posts\/2730","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/valugenius.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/valugenius.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/valugenius.in\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/valugenius.in\/blog\/wp-json\/wp\/v2\/comments?post=2730"}],"version-history":[{"count":28,"href":"https:\/\/valugenius.in\/blog\/wp-json\/wp\/v2\/posts\/2730\/revisions"}],"predecessor-version":[{"id":2763,"href":"https:\/\/valugenius.in\/blog\/wp-json\/wp\/v2\/posts\/2730\/revisions\/2763"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/valugenius.in\/blog\/wp-json\/wp\/v2\/media\/2750"}],"wp:attachment":[{"href":"https:\/\/valugenius.in\/blog\/wp-json\/wp\/v2\/media?parent=2730"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/valugenius.in\/blog\/wp-json\/wp\/v2\/categories?post=2730"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/valugenius.in\/blog\/wp-json\/wp\/v2\/tags?post=2730"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}