Introduction

In a strategic regulatory shift, the Securities and Exchange Board of India (SEBI) has revamped several key frameworks—most notably the valuation norms embedded within its takeover (SAST) regulations and related provisions. These amendments herald a fresh era of opportunity for Registered Valuers (RVs), transforming their market role from ancillary contributors to central decision-makers in corporate valuation processes. This article explores the implications, opportunities, and strategic importance of this shift, with a unique focus on how RVs can leverage these changes for professional growth and enhanced market relevance.

1. SEBI’s Strategic Shift: From Merchant Bankers to Registered Valuers

In its latest amendments to the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations (SAST), SEBI has formalized the role of Registered Valuers in determining fair value in open offers and other strategic valuation scenarios. Key elements of the change include:

a. Mandatory use of independent Registered Valuers for valuation in open offers where pricing parameters fail or are not available.

b. Authorized valuation responsibility has shifted away from merchant bankers and chartered accountants to IBBI Registered Valuers.

c. This responsibility includes the fair valuation of non-frequently traded shares and exchange ratios in share swaps or share exchange transactions.

d. A transition window (e.g., nine months) is often provided for ongoing matters to migrate to the new RV-based approach.

What This Means for RVs

RVs are no longer optional participants in valuation assignments but are mandated professionals in scenarios where valuation determines crucial transaction pricing and investor protection metrics. This structural shift elevates the professional importance, demand, and market visibility of Registered Valuation Experts.

2. Expanding Scope of Work Across Deal Types

Previously, valuations for open offers and related transactions were often conducted by merchant bankers or chartered accountants, with Registered Valuers taking on a secondary role—mainly in standalone Company Act assignments.

The regulatory amendments introduce new demand vectors:

a. Open offer valuations even when standard price formulas fail.

b. Certification of share swap ratios where listed securities are offered as payment in mergers or acquisitions.

c. Verification of valuation assumptions in buyback pricing, delisting bids, and other corporate actions.

This expansion creates a broader pipeline of valuation assignments along with more stringent independence requirements, thereby positioning RVs as indispensable contributors in corporate finance and securities law compliance.

3. Strategic Impact: Enhancing Market Integrity and Investor Trust

SEBI’s motive in reallocating valuation authority is rooted in enhancing the independence, transparency, and professional rigor:

a. Elimination of Conflicts of Interest: Merchant bankers or acquirers can no longer self-certify valuations.

b. Standardization of Valuation Methods: Greater reliance on uniform methodologies and accredited valuers reduces pricing ambiguity.

c. Improved Investor Protection: Independent valuations enhance fairness in transactions that materially affect minority or retail investors.

This strategic move places RVs at the heart of corporate governance, fairness in takeovers, and transparent capital market processes.

4. New Services and Practice Areas for RVs

Registered Valuers can now organically expand their services in areas such as:

a. Strategic Transaction Advisory: While RVs have traditionally been associated with reporting valuations, they can now offer advisory services related to valuation strategy—such as benchmarking fair price ranges, advice on valuation models (DCF, relative valuation, etc.), and assisting with valuation reporting frameworks.

b. Litigation and Regulatory Support: With valuation disputes and regulatory scrutiny increasing, RVs can act as expert witnesses, prepare valuation reports for judicial review, and assist entities in appeal or compliance scenarios.

c. Sector-Specific Valuation Expertise: Certain sectors—such as thinly traded shares, private equity, unlisted securities, and special purpose vehicles—require niche valuation expertise. RVs that specialize in these sectors can command higher fees and premium assignments.

5. Challenges and Professional Preparedness

While the opportunity for RVs is significant, adapting to SEBI’s enhanced expectations requires:

a. Mastery of valuation methodologies aligned with SEBI and international standards

b. Technical competence in reporting and documentation

c. Understanding of corporate finance, securities market dynamics, and legal compliance requirements

Professional development, continuous learning, and specialization in capital market valuation categories (open offers, share swaps, etc.) will differentiate high-impact RVs from general practitioners.

6. The Road Ahead: Premium Roles and Enhanced Recognition

SEBI’s regulatory realignment positions Registered Valuers as high-impact agents of market fairness and investor protection. Some broader trends RVs should watch include:

a. Potential integration of valuation functions in ESG disclosures

b. Rising demand for valuations in complex financial instruments and hybrid securities

c. Growth in transaction advisory practices linked to M&A, delisting, and buyback regulations

These trends point toward a more robust, respected, and professionally rewarding future for RVs in India’s capital markets.

Conclusion

SEBI’s amended regulations represent a paradigm shift for valuation professionals in India. By mandating Registered Valuers for critical valuation responsibilities and aligning valuation authority with statutory valuation frameworks, SEBI has:

a. Elevated professional relevance

b. Opened diversified revenue streams

c. Increased demand for technical valuation expertise

For Registered Valuers prepared to adapt and excel, today’s regulatory shift is not just a compliance requirement—it’s a strategic career inflection point.

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Disclaimer

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