RNC was the Moderator of Final Discussion in the National E-Summit organized by ASSOCHAM
Strengthening the Backbone of India’s IBC Ecosystem Through Better Valuation Practices
The Insolvency and Bankruptcy Code (IBC) has emerged as a landmark reform in India’s corporate ecosystem, streamlining insolvency resolution and debt recovery. However, one of the most critical—and often underappreciated—aspects of the process is valuation.
A comprehensive relook at IBC valuation practices is now underway, with industry stakeholders, policymakers, and professional valuers recognizing the urgent need to enhance accuracy, consistency, and transparency.
The Need for a Valuation Revamp
In IBC proceedings, the valuation of the corporate debtor’s assets and business directly impacts:
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The outcome of resolution plans
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The recovery value for creditors
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The decision-making process of the Committee of Creditors (CoC)
Despite its importance, valuation is often challenged on grounds of subjectivity, inconsistencies between valuers, or lack of clarity in methodology.
Challenges in the Current IBC Valuation Framework
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Inconsistent Methodologies: Different valuers may use different approaches (DCF, NAV, market multiple), leading to varying outcomes.
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Insufficient Data Access: Lack of access to real-time financials and asset records limits accuracy.
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Lack of Training: Some registered valuers may not have deep domain expertise in distressed asset valuation.
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Disputes in Resolution Plans: Discrepancies between liquidation and fair market value often lead to legal challenges and delays.
These issues highlight the pressing need for a structured, standardized, and reform-oriented approach.
What the “Relook” Involves
Several committees and industry think tanks are now recommending:
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Updated guidelines from the Insolvency and Bankruptcy Board of India (IBBI)
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Unified valuation frameworks for distressed assets
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Mandatory auditor-quality documentation from valuers
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Integration of technology and digital tools for more accurate and efficient valuation
RNC’s Perspective: Building a More Reliable IBC Valuation Ecosystem
As a leading valuation services provider in India, RNC welcomes the ongoing relook into IBC valuation practices. Our experts believe the following steps can create long-term value:
✅ Benchmarking valuation assumptions based on industry averages
✅ Encouraging dual valuation review mechanisms for better credibility
✅ Implementing valuation audits for high-value or disputed cases
✅ Offering capacity-building programs for new Registered Valuers
✅ Creating a national repository of historical IBC valuation data
By aligning valuation practices with global standards, India can significantly reduce friction in the insolvency resolution process.
The Way Forward
A robust, transparent valuation mechanism will:
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Accelerate insolvency timelines
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Reduce litigation risks
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Improve bidder confidence and participation
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Enhance overall recovery for creditors
As India continues to refine its insolvency architecture, IBC valuation reform must remain a central agenda.
Why Choose RNC for IBC Valuation?
With over four decades of experience in asset and business valuation, RNC Valuecon LLP brings unmatched domain expertise, regulatory compliance, and ethical practices to every IBC engagement.
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