Registered Valuer vs Chartered Accountant vs Merchant Banker: Who Can Legally Value What in India
Ask three finance professionals who should value a company. You'll get three different answers.
That's because valuing a company in India isn't one job. It's three jobs. Each one belongs to a professional and the law decides who does what. Not cost not convenience, not who you already know.
Get the person to sign your valuation and it can come back to bite you. Even if the number itself was correct.
Think of It as Three Different Doors
"Valuation" sounds like a thing. Legally it isn't. There are three situations that need a valuation in India and each one has its own approved professional. Think of them as three doors. Each with a key.
Door 1: When you're dealing with the Companies Act
Example situations: a merger, a company buyback or a company going through insolvency (IBC).
Only a Registered Valuer (RV) can open this door. This is a qualification. Regulated by IBBI (a government body). That someone has to train and register for. Being an accountant isn't enough. You need this certification.
Door 2: When you're dealing with the Income Tax Act
The common example: a startup issuing shares to investors, where "angel tax" (Rule 11UA) comes into play.
Here a Chartered Accountant (CA) is usually the person to certify the value. This is the valuation most founders run into first.
Door 3: When you're dealing with SEBI (for listed companies)
Examples: a listed company issuing shares to select investors or getting delisted from the stock exchange.
This door belongs to a Merchant Banker. A professional registered with SEBI from both the Companies Act and Income Tax rules.
Why People Get This Wrong?
Most companies don't think about which door they're walking through. They just call whichever professional they already work with. Their CA. And assume that's good enough.
It often isn't.
Here's the key thing to understand: being good at valuation and being legally allowed to certify one are two things.
A CA might be excellent at their job but still not be allowed to sign a valuation needed for a company merger. That job belongs to a Registered Valuer.
A Merchant Banker might do a good job pricing shares for a stock market deal. But they can't certify a valuation for an insolvency case. That's an RVs job too.
This is why valuations sometimes get rejected by the Registrar of Companies.Why a tax notice shows up years after a company raised funding. Usually it's not because the number was wrong. It's because the wrong professional signed off on it.
A Few Situations Are More Flexible. To keep things simple: yes there are a cases where more than one type of professional is allowed to do the valuation. For example some cross-border share deals (under FEMA rules) can be signed off by either a CA or a Merchant Banker.
Registered Valuers are sometimes allowed to do work that overlaps with what a CA or Merchant Banker normally does.
It doesn't work the other way around. A CA or Merchant Banker cannot simply take on a job that specifically requires a Registered Valuer. No matter how experienced they are. The law is strict, about this because Registered Valuers are trained and certified specifically for these situations.
At RegisteredValuer.com, we help founders, CFOs, and investors get this right the first time so that their valuations hold up, not just look good.
