The Securities and Exchange Board of India (SEBI) has officially introduced Uniform Valuation Guidelines for all listed public limited companies, aiming to bring consistency, transparency, and comparability in the valuation of corporate assets. Effective from October 1, 2028, these guidelines will apply to mergers and acquisitions, IPO disclosures, slump sales, demergers, restructuring proposals, and related party transactions involving significant assets. The move is part of SEBI’s broader effort to protect investors and prevent discrepancies in financial reporting that may mislead stakeholders or distort market valuations.

Under the new framework, all listed companies must conduct asset valuations through SEBI-registered independent valuers, using standard methodologies such as Discounted Cash Flow (DCF), Comparable Company Analysis, or Asset-Based Valuation, depending on the nature of the asset and the transaction. Companies must disclose the valuation method, key assumptions, sensitivity analyses, and fairness opinions in all relevant filings—including draft red herring prospectuses (DRHPs), scheme documents, and shareholder notices. Additionally, valuation reports for material transactions (above 10% of net worth) must be made publicly available through stock exchange platforms and the company’s investor relations portal.

To ensure accountability, SEBI has established a dedicated Valuation Oversight Committee, which will audit randomly selected reports, investigate complaints, and maintain a registry of defaulting valuers. Any misstatement or manipulation in asset valuation could result in penalties, disqualification of valuers, and suspension of the transaction, along with potential legal action under the SEBI Act and Companies Act. Industry experts have lauded the initiative as a vital reform that enhances investor protection, strengthens corporate governance, and aligns India’s capital market regulations with international valuation standards. The guidelines are expected to significantly reduce valuation disputes and improve confidence in capital market transactions.