Last updated: 14 Oct 2026

Virtual Auditor

Valuation under Section 247 Companies Act

Last updated: 14 Oct 2026

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Quick answer: Section 247 of the Companies Act requires that valuations mandated under the Act — mergers, sweat equity, non-cash transactions, further share issues — be performed by an IBBI Registered Valuer. The valuer must be independent, follow prescribed standards and bears statutory liability for defective valuations, which makes credentials and methodology critical.

Looking for expert valuation under section 247 companies act? Virtual Auditor provides practitioner-grade valuation services in India, led by CA V. Viswanathan — IBBI Registered Valuer (IBBI/RV/03/2019/12333) | Fellow Chartered Accountant (FCA) | Associate Company Secretary (ACS) | Certified Fraud Examiner (CFE). We combine deep regulatory expertise with hands-on execution to deliver results within your timeline.

What We Deliver

IBBI-compliant valuation report (60-120 pages) with detailed methodology, assumptions, and sensitivity analysis. Executive summary with clear value conclusion suitable for regulatory filing. Compliance certificate confirming adherence to ICAI Valuation Standards, IVS, and applicable regulations. Multi-method analysis: DCF, NAV, Market Multiples, Comparable Transactions, with 10,000 Monte Carlo simulations where applicable. Supporting schedules, data sources, and management representation letter template.

Last reviewed: July 2026 by CA V. Viswanathan (FCA, ACS, CFE, IBBI Registered Valuer)

Section 247 — the Backbone of the Registered-Valuer Regime

Section 247 of the Companies Act, 2013 created, for the first time in Indian company law, a licensed profession of valuers. Where any property, stock, shares, debentures, securities, goodwill or net worth of a company (or its liabilities) has to be valued under any provision of the Act, that valuation must be conducted by a person registered as a Registered Valuer (RV) under the Companies (Registered Valuers and Valuation) Rules, 2017. The Insolvency and Bankruptcy Board of India (IBBI) is the notified authority that administers registration. A valuation done by anyone who is not an IBBI-registered valuer for a Section 247 purpose is, quite simply, not a valid valuation under the Act — and the corporate action resting on it is exposed to challenge.

This is the provision founders and boards most often misunderstand. A Chartered Accountant's certificate that is perfectly valid for an income-tax filing is not a substitute for a Registered Valuer's report where the Companies Act demands one. The two regimes run in parallel, and the same transaction — a preferential allotment to a foreign investor, say — can simultaneously need an RV report (Companies Act), a merchant-banker report (Rule 11UA), and a CA certificate (FEMA). Getting the correct hat on the correct report is the first job of any competent adviser.

Every Companies Act Trigger That Forces a Registered Valuer

The Act scatters valuation requirements across several chapters. These are the ones that bite most frequently in practice:

SectionCorporate actionWhat the RV values
62(1)(c)Further issue of shares by preferential allotment / private placementFair value per share to fix the issue price
192(2)Non-cash transaction involving a director or connected personThe asset being acquired or disposed of
230(2)(c) & 230(3)Scheme of compromise or arrangementValuation report circulated with the notice to creditors/members
232(2)(d)Merger or amalgamation before the NCLTShare-exchange (swap) ratio between the companies
236(2)Purchase of minority shareholding (squeeze-out on reaching 90%)Fair exit price for the minority
281(1)(a)Winding up — statement of affairs by the liquidatorAssets of the company for realisation

Beyond these, an RV report is expected wherever a scheme, a court/tribunal direction, or a related-party framework calls for an independent value. For amalgamation schemes the swap ratio is usually paired with a merchant banker's fairness opinion, and for minority squeeze-outs under Section 236 the fairness of the RV's exit price is precisely what aggrieved shareholders litigate.

The Duties Section 247(2) Imposes on the Valuer

Registration is not a rubber stamp; it comes with statutory duties whose breach carries personal consequences. Under Section 247(2) and the 2017 Rules, a Registered Valuer must:

  • Be independent and conflict-free — a valuer must not value any asset in which they have a direct or indirect interest, or acquire such an interest during, or within three years after, the valuation.
  • Make an impartial, true and fair valuation — exercising due diligence, and disclosing the assumptions and limitations on which the opinion rests.
  • Comply with the applicable valuation standards — currently the IBBI/ICAI valuation standards and the approach mandated by the Rules.
  • Not undertake valuation of assets they are not competent to value — an RV registered for Securities or Financial Assets cannot sign off on Land & Building, and vice versa.
  • Maintain the working-paper record that supports the conclusion — because when the NCLT, an auditor or a dissenting shareholder asks how the number was reached, the file is the defence.

Liability and the Cost of a Non-RV Valuation

Section 247(3) provides that a valuer who contravenes the provisions or the rules is liable to a penalty, and — where the contravention is done with the intention to defraud the company or its members — to imprisonment for up to one year together with a fine. On top of that, Section 247(4) requires a defaulting valuer to refund the remuneration received and to pay for damages caused to the company or any other person by reason of incorrect or misleading statements in the valuation report. This is genuine personal exposure, and it is why a credible RV report reads conservatively and documents everything.

For the company, the risk is different but equally serious. A corporate action grounded on a valuation by an unregistered person can be treated as defective: the NCLT can decline to sanction a scheme, a preferential allotment can be questioned, and diligence teams on a later fundraise or sale will flag it. Re-doing a valuation after the transaction has closed is far costlier — commercially and legally — than commissioning the correct RV report up front.

The most common error we correct: a board passing a Section 62(1)(c) preferential-allotment resolution on the strength of a plain CA valuation certificate, unaware that the Act requires a Registered Valuer's report. The allotment is then vulnerable until a proper RV report is placed on record.

How We Deliver Section 247 Valuations

Our valuations are signed by CA V. Viswanathan, an IBBI Registered Valuer (Securities or Financial Assets, IBBI/RV/03/2019/12333), so the report is valid on its face for Companies Act purposes. We identify the exact section driving the requirement, select the method the standards mandate, and — where the same transaction also engages tax or FEMA — coordinate the parallel reports so they reconcile. Engagements are run from our Chennai head office at Spencer Plaza (+91 99622 60333), with valuers available in Bengaluru (+91 95139 39333) and Mumbai (+91 77000 89597).

ServiceFee (from)
Section 62(1)(c) preferential-allotment RV report₹30,000
Section 232 merger swap-ratio report₹75,000
Section 236 minority squeeze-out exit valuation₹60,000
Section 192 non-cash director transaction valuation₹35,000

Our Process

Step 1: Engagement scoping and purpose identification. Step 2: Data collection — financials, projections, cap table, agreements. Step 3: Multi-method valuation analysis with statistical validation. Step 4: Draft report review with management. Step 5: Final IBBI-compliant report delivery with compliance certificate.

Every valuation report is personally reviewed and signed by CA V. Viswanathan, ensuring consistency, quality, and regulatory compliance. Our IBBI registration number IBBI/RV/03/2019/12333 appears on every report, establishing authenticity and traceability.

Get Started Today

Ready to engage Virtual Auditor for valuation under section 247 companies act? Contact us for a free initial consultation:

Call/WhatsApp: +91 99622 60333

Email: support@virtualauditor.in

Offices: Chennai | Bangalore | Mumbai

No obligation. We will assess your requirements and provide a clear scope, timeline, and fixed-fee quote within 24 hours.

What has changed in the law — reviewed October 2026

  • Income-tax Act, 2025: assented to on 21 August 2025 and in force from 1 April 2026, it replaces the Income-tax Act, 1961 for tax year 2026-27 onward, and the Income-tax Rules, 2026 (notified 20 March 2026) replace the 1962 Rules. Section and rule numbers on this page are those of the 1961 Act and 1962 Rules, which continue to govern assessments, appeals and pending proceedings for assessment years up to 2026-27; for tax year 2026-27 onward the corresponding provisions of the 2025 Act apply, and our engagement letters quote both.

Frequently Asked Questions

What is Section 247 of the Companies Act, 2013?
Section 247 establishes the registered-valuer regime. It provides that wherever a valuation of property, stock, shares, debentures, securities, goodwill, net worth or liabilities of a company is required under any provision of the Act, it must be carried out by a person registered as a valuer under the Companies (Registered Valuers and Valuation) Rules, 2017, with the IBBI as the notified authority. It also fixes the valuer's duties of independence and impartiality and prescribes penalties for breach.
Which company transactions legally require a registered valuer?
The recurring triggers are a further issue of shares by preferential allotment or private placement under Section 62(1)(c); non-cash transactions with directors under Section 192; schemes of compromise or arrangement under Section 230; mergers and amalgamations under Section 232 (for the share-exchange ratio); purchase of minority shareholding under Section 236; and asset valuation on winding up under Section 281. Any scheme or tribunal direction calling for an independent value also needs a registered valuer's report.
Can a Chartered Accountant sign a Companies Act valuation without IBBI registration?
No — not for a Section 247 purpose. A CA's ordinary certificate is valid for income-tax or FEMA filings, but where the Companies Act itself requires the valuation, only an IBBI Registered Valuer's report will do, and the CA must hold that separate RV registration in the relevant asset class. The two roles are distinct even when the same professional performs both; the report must be issued in the correct capacity to be legally effective.
What are the penalties for a valuation done by a non-registered valuer?
For the valuer, Section 247(3) prescribes a penalty, rising to imprisonment of up to one year plus fine where the intent was to defraud, and Section 247(4) requires refund of the fee and payment of damages caused by an incorrect or misleading report. For the company, a corporate action based on a non-RV valuation is defective and open to challenge — the NCLT may refuse to sanction a scheme, and a preferential allotment or squeeze-out can be questioned by affected members.
What are the asset classes a registered valuer can be registered for?
The 2017 Rules recognise three asset classes: Land and Building (L&B); Plant and Machinery (P&M); and Securities or Financial Assets (SFA). A valuer is registered for one or more classes based on qualification and experience, and may value only within the class(es) held. Share, business and instrument valuations fall under Securities or Financial Assets; property and machinery collateral require the L&B and P&M classes respectively — which is why complex assignments sometimes need more than one valuer.
Who can become a registered valuer under Section 247?
An individual must hold the prescribed qualification with the requisite post-qualification experience for the asset class, complete the educational course delivered by a Registered Valuers Organisation (RVO), pass the IBBI valuation examination for that asset class, and then be registered by the IBBI through the RVO of which they are a member. Partnership entities and companies can also register subject to conditions. The registration number, in the form IBBI/RV/03/2019/12333, is verifiable on the IBBI portal.
Is a fairness opinion the same as a registered-valuer report?
No. A registered-valuer report determines a value or a share-exchange ratio under the Act; a fairness opinion is a merchant banker's independent view on whether that ratio or price is fair to the shareholders. In an NCLT merger, boards typically obtain both — the RV report under Section 232 and a fairness opinion for good governance — because they answer different questions. We deliver the RV report and coordinate the fairness opinion where the transaction or a listed entity's obligations require one.
Which professional qualification and report scope do I need for this valuation?
Match the purpose to the signatory. Valuations required by the Companies Act or the Insolvency and Bankruptcy Code need an IBBI Registered Valuer in the right asset class: Securities or Financial Assets for shares and businesses, Land and Building, or Plant and Machinery. FEMA pricing needs a Chartered Accountant in practice, a SEBI-registered merchant banker or a practising cost accountant. A DCF report under Rule 11UA and the fair market value of unlisted shares for ESOP perquisite tax need a SEBI-registered Category I merchant banker. Accounting fair values can be prepared by any competent valuer and are reviewed by the auditor. You can check any Registered Valuer on the IBBI website. CA V. Viswanathan is registered with the IBBI for Securities or Financial Assets (IBBI/RV/03/2019/12333) and practises as a Chartered Accountant.

Related Services

Valuation Services by IBBI Registered ValuerBusiness Valuation Services in IndiaCompanies Act ValuationSection 56(2)(viib) Valuation ReportODI Valuation Report under FEMAAngel Tax Valuation in AssamAngel Tax Valuation in AurangabadAngel Tax Valuation in Bihar

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What has changed in the law — reviewed October 2026

  • Income-tax Act, 2025: assented to on 21 August 2025 and in force from 1 April 2026, it replaces the Income-tax Act, 1961 for tax year 2026-27 onward, and the Income-tax Rules, 2026 (notified 20 March 2026) replace the 1962 Rules. Section and rule numbers on this page are those of the 1961 Act and 1962 Rules, which continue to govern assessments, appeals and pending proceedings for assessment years up to 2026-27; for tax year 2026-27 onward the corresponding provisions of the 2025 Act apply, and our engagement letters quote both.

Which laws govern this service? — Valuation

The statutory provisions this service is delivered under, linked to the official text:

Strategic Business & Compliance Insights

Frequently Asked Questions

What is Section 247 of the Companies Act, 2013?
Section 247 establishes the registered-valuer regime. It provides that wherever a valuation of property, stock, shares, debentures, securities, goodwill, net worth or liabilities of a company is required under any provision of the Act, it must be carried out by a person registered as a valuer under the Companies (Registered Valuers and Valuation) Rules, 2017, with the IBBI as the notified authority. It also fixes the valuer's duties of independence and impartiality and prescribes penalties for breach.
Which company transactions legally require a registered valuer?
The recurring triggers are a further issue of shares by preferential allotment or private placement under Section 62(1)(c); non-cash transactions with directors under Section 192; schemes of compromise or arrangement under Section 230; mergers and amalgamations under Section 232 (for the share-exchange ratio); purchase of minority shareholding under Section 236; and asset valuation on winding up under Section 281. Any scheme or tribunal direction calling for an independent value also needs a registered valuer's report.
Can a Chartered Accountant sign a Companies Act valuation without IBBI registration?
No — not for a Section 247 purpose. A CA's ordinary certificate is valid for income-tax or FEMA filings, but where the Companies Act itself requires the valuation, only an IBBI Registered Valuer's report will do, and the CA must hold that separate RV registration in the relevant asset class. The two roles are distinct even when the same professional performs both; the report must be issued in the correct capacity to be legally effective.
What are the penalties for a valuation done by a non-registered valuer?
For the valuer, Section 247(3) prescribes a penalty, rising to imprisonment of up to one year plus fine where the intent was to defraud, and Section 247(4) requires refund of the fee and payment of damages caused by an incorrect or misleading report. For the company, a corporate action based on a non-RV valuation is defective and open to challenge — the NCLT may refuse to sanction a scheme, and a preferential allotment or squeeze-out can be questioned by affected members.
What are the asset classes a registered valuer can be registered for?
The 2017 Rules recognise three asset classes: Land and Building (L&B); Plant and Machinery (P&M); and Securities or Financial Assets (SFA). A valuer is registered for one or more classes based on qualification and experience, and may value only within the class(es) held. Share, business and instrument valuations fall under Securities or Financial Assets; property and machinery collateral require the L&B and P&M classes respectively — which is why complex assignments sometimes need more than one valuer.
Who can become a registered valuer under Section 247?
An individual must hold the prescribed qualification with the requisite post-qualification experience for the asset class, complete the educational course delivered by a Registered Valuers Organisation (RVO), pass the IBBI valuation examination for that asset class, and then be registered by the IBBI through the RVO of which they are a member. Partnership entities and companies can also register subject to conditions. The registration number, in the form IBBI/RV/03/2019/12333, is verifiable on the IBBI portal.
Is a fairness opinion the same as a registered-valuer report?
No. A registered-valuer report determines a value or a share-exchange ratio under the Act; a fairness opinion is a merchant banker's independent view on whether that ratio or price is fair to the shareholders. In an NCLT merger, boards typically obtain both — the RV report under Section 232 and a fairness opinion for good governance — because they answer different questions. We deliver the RV report and coordinate the fairness opinion where the transaction or a listed entity's obligations require one.
Which professional qualification and report scope do I need for this valuation?
Match the purpose to the signatory. Valuations required by the Companies Act or the Insolvency and Bankruptcy Code need an IBBI Registered Valuer in the right asset class: Securities or Financial Assets for shares and businesses, Land and Building, or Plant and Machinery. FEMA pricing needs a Chartered Accountant in practice, a SEBI-registered merchant banker or a practising cost accountant. A DCF report under Rule 11UA and the fair market value of unlisted shares for ESOP perquisite tax need a SEBI-registered Category I merchant banker. Accounting fair values can be prepared by any competent valuer and are reviewed by the auditor. You can check any Registered Valuer on the IBBI website. CA V. Viswanathan is registered with the IBBI for Securities or Financial Assets (IBBI/RV/03/2019/12333) and practises as a Chartered Accountant.