AIF Portfolio Valuation Services

SEBI's AIF (Valuation) Framework, last revised by Circular dated November 2023 effective from 1 May 2024, mandates independent valuation of Alternative Investment Fund portfolios at minimum half-yearly intervals (quarterly for Category III). The valuer must be a member of ICAI/IBBI/RICS or hold equivalent IBBI Registered Valuer registration. Virtual Auditor's CA V. Viswanathan is an IBBI Registered Valuer (IBBI/RV/03/2019/12333) for Securities and Financial Assets, and our team has valued unlisted equity, debt instruments, real estate, infrastructure, and complex hybrid securities for AIFs across Categories I, II and III.

SEBI Framework — What Changed in 2023

Prior to the November 2023 amendments, AIF valuation practices varied widely — many funds relied on cost or self-valuation with light independent oversight. The 2023 framework introduced: (1) mandatory independent valuer with specified credentials; (2) standardised valuation methodologies aligned with International Valuation Standards (IVS) or accepted Indian standards; (3) consistent application year-on-year with explicit disclosure of any methodology change; (4) board-level oversight by the AIF's investment committee or valuation committee; (5) auditor sign-off on valuation policy adherence; (6) disclosure to investors of methodology, key assumptions, sensitivities. Material valuation differences from previously published NAV trigger investor communication and SEBI reporting obligations.

Methodologies by Asset Class

(a) Listed equity — observable market price (closing or VWAP per fund's policy), with adjustment for blocked holdings; (b) Unlisted equity in early-stage portfolio — recent transaction price (Series funding round) for 12 months, then DCF/income approach; (c) Unlisted equity in mature private companies — DCF or comparable-company multiples (EV/EBITDA, P/E, P/Sales); (d) Convertible instruments (CCPS, CCD) — option-pricing models (Black-Scholes, binomial tree) layered on equity valuation; (e) Debt instruments — DCF using applicable yield curves and credit spreads; (f) Real estate — income capitalisation and direct comparison; (g) Infrastructure — long-horizon DCF with regulatory cash-flow modelling. Each method must be applied consistently and disclosed in the valuation policy.

Independence and Credentials

The independent valuer must be: (a) a member of ICAI, IBBI, or RICS; (b) hold appropriate IBBI registration for the asset class (Securities and Financial Assets, or Land and Buildings); (c) be independent of the AIF manager, sponsor, and trustee for at least 1 year; (d) not have provided audit, tax, or advisory services to the AIF or its sponsor in the year preceding appointment; (e) be appointed for a maximum 4-year term with mandatory rotation thereafter. The AIF manager must disclose the valuer's credentials and independence statement to investors annually.

Frequency and Disclosure

Category I and II AIFs: minimum half-yearly valuation. Category III AIFs (which trade public-market instruments and use leverage): minimum quarterly. All AIFs must disclose unrealised valuation in their unit-holders' statement and on the investor portal. Material change in NAV (typically defined as >5% change attributable to revaluation rather than transaction) triggers prior intimation to investors and to SEBI. Annual reports must contain the valuation policy, methodology used, independence declaration of the valuer, and sensitivity table for key assumptions.

Practical Engagement Process

Phase 1 — Policy review (week 1): review the AIF's existing valuation policy; identify alignment with SEBI 2023 framework; draft amendments. Phase 2 — Portfolio inventory (week 2): receive complete portfolio listing with cost, current carrying value, last-round terms, financial statements of investee, and any restrictions. Phase 3 — Valuation (week 3-5): apply method by asset class; build DCF/option-pricing models; document assumptions; compute sensitivity. Phase 4 — Internal review (week 6): senior CA and IBBI Valuer review; quality control. Phase 5 — Reporting (week 7): valuation report addressed to AIF trustee/manager; investor communication template; auditor file. Phase 6 — Ongoing surveillance: monthly check-ins between valuation cycles to flag triggering events (new financing rounds, distress, exit signals).

Fees

AIF valuation fees depend on portfolio complexity, number of investee companies, and asset class mix. Typical: ₹3-12 lakhs per valuation cycle for an early-stage VC fund with 15-30 portfolio companies. Larger PE funds with complex hybrid instruments: ₹10-30 lakhs per cycle. Real-estate AIFs: ₹15-50 lakhs depending on number of assets and geographies. Annual engagement (covering 2-4 cycles) typically priced at 60-80% of per-cycle rate due to efficiency from data continuity. We provide fixed-fee quotes after a free 1-hour scoping call.

How Virtual Auditor Delivers This

Virtual Auditor's CA-CS-IBBI Valuer team handles aif portfolio valuation services as an integrated engagement — no hand-offs between firms, single point of accountability, fixed-fee transparency. CA V. Viswanathan (FCA, ACS, CFE, IBBI RV) personally reviews every engagement deliverable. Offices in Chennai, Bangalore, and Mumbai serve clients across India. Free 30-minute scoping consultation available — no obligation.

Get Started — Book a Consultation

Call +91 99622 60333 or email support@virtualauditor.in to schedule a free 30-minute consultation with CA V. Viswanathan. No obligation. We will give you a clear scope, timeline, and fixed-fee quote within 24 hours of the call.