Introduction
The Corporate Laws (Amendment) Bill, 2026 (Bill No. 85 of 2026), introduced by Finance Minister Nirmala Sitharaman in the Lok Sabha on March 23, 2026, proposes 107 amendments to the Companies Act, 2013 and the Limited Liability Partnership Act, 2008. Among its most consequential provisions is Clause 73, which designates the Insolvency and Bankruptcy Board of India (IBBI) as the sole Valuation Authority under Section 247 of the Companies Act, 2013. The Bill currently stands referred to a Joint Parliamentary Committee (JPC) for scrutiny.
The Existing Valuation Framework Under Indian Company Law
Section 247 of the Companies Act, 2013 currently mandates that valuations required under the Act, whether for share capital, assets, goodwill, net worth, liabilities, or business, must be conducted by a registered valuer. The profession is presently regulated under the Companies (Registered Valuers and Valuation) Rules, 2017, framed under Section 458 of the Act, with IBBI acting as the delegated “Authority” for administering these Rules since October 2017. Registered Valuer Organisations (RVOs), recognised under these Rules, oversee the conduct and discipline of their members, while IBBI retains appellate and residual regulatory powers.
This arrangement has meant that valuation for company law purposes runs parallel to valuation conducted for the purposes of the Insolvency and Bankruptcy Code, 2016 (IBC), where valuers are appointed by resolution professionals under the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and the IBBI (Liquidation Process) Regulations, 2016. Multiple regulators, including the Securities and Exchange Board of India (SEBI) for listed company transactions and the Reserve Bank of India for foreign exchange pricing under the Foreign Exchange Management Act, 1999, also rely on registered valuer certifications without a single unifying supervisory body for the valuation profession itself.
What Clause 73 Proposes
Clause 73 amends Section 247 of the Companies Act, 2013, to formally designate IBBI as the Valuation Authority in place of the fragmented arrangement described above. Under the amended framework, IBBI will:
- Grant certificates of registration and recognition to individual valuers, valuer entities, and valuer organisations.
- Prescribe eligibility, qualification, and continuing education norms for registered valuers.
- Recommend valuation standards to the Central Government for notification.
- Conduct inspections, disciplinary proceedings, and impose penalties on errant valuers.
Registered valuers who contravene the prescribed norms face suspension of their certificate of registration for up to ten years, or a monetary penalty of up to ₹10 lakh, or both. All valuations required under provisions of the Companies Act relating to capital reduction under Section 66, buy-back under Section 68, mergers and demergers under Sections 230 to 232, and preferential allotments under Section 62, will now require an IBBI-registered valuer. A related governance change requires that valuers for company-law purposes be appointed by the Audit Committee through a formal resolution, rather than left to management discretion as under the present practice.
The Regulatory Logic: Consolidation Over Fragmentation
The stated legislative rationale for Clause 73 draws from the Company Law Committee Report, 2022 and the High-Level Committee on Non-Financial Regulatory Reforms, 2025, both of which flagged the absence of a unified definition and disciplinary framework for “registered valuer” across company law and insolvency law. Centralising this function under one authority is intended to eliminate regulatory arbitrage between differing standards applied by various RVOs, produce uniform valuation methodology across M&A, related-party transactions, and insolvency resolution, and strengthen enforcement through a single disciplinary body with statutory teeth under the Companies Act framework.
This mirrors a broader pattern in the Bill of consolidating oversight functions, visible also in the expansion of the National Financial Reporting Authority (NFRA) into an enforcement-driven regulator for auditors under Section 132, bringing NFRA’s appellate structure closer in form to sectoral regulators such as SEBI and the Competition Commission of India (CCI).
The Institutional Overload Concern
IBBI’s existing statutory mandate under the IBC is already extensive. It regulates insolvency professionals, insolvency professional agencies, and information utilities, while simultaneously administering the corporate insolvency resolution process, liquidation process, and voluntary liquidation framework under Sections 33 to 59 of the Code. Layering an additional, distinct regulatory vertical, covering the entirety of company-law valuation across every listed and unlisted company undertaking a merger, buy-back, or preferential issue, onto this existing mandate raises a genuine capacity question.
Registered valuers currently number in the low thousands across three asset classes: land and building, plant and machinery, and securities or financial assets. Absorbing supervisory responsibility for this entire cadre, alongside disciplinary adjudication, standard-setting, and inspection duties, will require a corresponding expansion of IBBI’s own institutional resources, including technical staff with valuation expertise distinct from insolvency administration. Without matching investment in manpower and infrastructure, the risk is that the substantive quality of oversight simply migrates from a fragmented but functioning RVO structure to an overburdened single regulator.
The Conflict-of-Interest Question
A more structural concern arises from IBBI’s dual identity once Clause 73 takes effect. IBBI already appoints, regulates, and disciplines the resolution professionals and liquidators who rely on registered valuers to determine fair value and liquidation value during corporate insolvency resolution process (CIRP) and liquidation under the IBC. If IBBI simultaneously becomes the sole licensing and disciplinary authority for the valuers themselves, the same regulator ends up supervising both sides of a valuation exercise that materially affects the outcome of insolvency proceedings it also administers.
This is distinguishable from, say, SEBI’s relationship with credit rating agencies, where SEBI is not itself a party whose statutory process depends on the rating outcome. Here, IBBI’s institutional interest in the smooth functioning of CIRP timelines under Section 12 of the Code, and its own performance metrics tied to resolution outcomes, sit alongside its new role as disciplinarian of the very professionals who value the assets underlying those outcomes. A valuer who values a stressed asset conservatively, or aggressively, in a manner that affects Committee of Creditors decision-making, now answers to a regulator with a stake in the process. This is not a hypothetical concern; it goes to the independence that Section 247 valuations are meant to guarantee.
Governance and Compliance Implications for Companies
For company secretaries, audit committees, and M&A counsel, Clause 73 changes the daily mechanics of valuation appointments in three concrete ways.
First, valuer engagement for statutory purposes shifts from management prerogative to a formal Audit Committee resolution, adding a documented governance layer and audit trail for every valuation exercise.
Second, companies must verify that any valuer engaged for mergers, share transfers, related-party transactions, or capital restructuring under the Companies Act holds a current IBBI-issued registration; valuations by non-registered individuals will not satisfy statutory compliance.
Third, the tightened penalty regime, suspension for up to a decade or a ₹10 lakh fine, is likely to make registered valuers more conservative and more heavily documented in their reporting, which may lengthen timelines for transactions such as fast-track mergers under the amended Section 233 or buy-backs under Section 68 that already operate on compressed statutory windows.
Comparative Regulatory Design
Sectoral consolidation of this kind is not unprecedented in Indian financial regulation. SEBI performs an analogous unifying function for capital market intermediaries under the Securities and Exchange Board of India Act, 1992, and the CCI does the same for competition oversight under the Competition Act, 2002. In both cases, however, the regulator’s core statutory mandate is distinct from the commercial outcome of the entities or professionals it supervises. IBBI’s position is structurally different because valuation outcomes directly feed into IBC processes that IBBI itself administers as the nodal regulator, making the analogy to SEBI or CCI only partially applicable and reinforcing the case for a ring-fenced valuation vertical within IBBI, insulated by design from its insolvency-administration functions.
The Way Forward
Three safeguards would meaningfully address the concerns raised by Clause 73 without abandoning the underlying goal of a unified valuation regulator.
A structurally separate valuation division within IBBI, with independent reporting lines and personnel distinct from those administering CIRP and liquidation, would reduce the conflict-of-interest exposure described above. Statutory timelines for IBBI’s disciplinary proceedings against valuers, similar to the timelines the Bill itself introduces for NCLT scheme approvals, would prevent disciplinary backlogs. Finally, a transition period with phased onboarding of existing RVO-registered valuers, rather than an abrupt cutover, would reduce disruption to ongoing M&A and insolvency valuations already in progress when the provision is notified.
Conclusion
Clause 73 of the Corporate Laws (Amendment) Bill, 2026 addresses a genuine gap in India’s company law framework: the absence of a single, accountable regulator for the valuation profession. The consolidation of registered valuer oversight under IBBI, backed by a stronger penalty regime and an Audit Committee appointment requirement, is a defensible legislative response to a fragmented status quo. Whether the reform strengthens valuation integrity or simply relocates its weaknesses will depend on how the Joint Parliamentary Committee addresses the institutional capacity and conflict-of-interest questions before the Bill is enacted. Companies, registered valuers, and professionals advising on M&A and insolvency transactions should track the JPC’s report closely, since the final contours of IBBI’s valuation mandate may differ materially from the text as introduced.
The broader reforms examined in Corporate Laws (Amendment) Bill 2026: A Legal Analysis also include significant changes to India’s valuation framework, particularly the proposal to designate the IBBI as the central regulatory authority for registered valuers.
