Dominating the Market in IBC Valuation with over 60% Market Share Conduct IBC valuation with our experts and know the financial health and value of your company Successfully completed valuation of 5000+ businesses across 20+ industries Timely delivery of IBC valuation report, Best in the Market Overview of Insolvency & Bankruptcy Code in India (IBC) In 2016, the Central government of India implemented the Insolvency and Bankruptcy Code (IBC) to address issues related to bankrupt firms. This aimed to address the issues of non-performing loans impacting the banking sector. After two years, the IBC has largely succeeded in preventing companies from failing to repay their loans. The IBC process has altered the debtor-creditor relationship. Several significant cases have been settled within the past two years, and additional cases are currently in the advanced stages of resolution. Business valuation under insolvency and bankruptcy code is valuable in the current scenario. What is Section 4 of IBC? Section 4 sets the minimum default amount required to initiate insolvency resolution and liquidation for corporate entities under the Insolvency and Bankruptcy Code (IBC). According to this section, the Central Government has established one crore rupees as the minimum default threshold. Additionally, Section 4 grants authority to release notifications and create rules or regulations under various sections of the IBC, exercising delegated legislative power. Importance of Valuation Under IBC Process Valuation plays a crucial role in the Insolvency and Bankruptcy Code (IBC) process by accurately assessing asset value, developing successful resolution strategies, and guaranteeing equitable distribution to creditors. Valuation under IBC provides a solid foundation for negotiations between potential buyers and creditors. An essential part of this procedure is the precise and timely assessment of the assets belonging to the company in debt. This assessment is crucial for maximizing asset value for creditors and ensuring a fair result for all stakeholders. Valuation under IBC process is a cornerstone in ensuring efficient resolution of corporate insolvency. Businesses must understand the importance of IBC valuation. Reach out to IBC consultants for accurate valuation, which is highly recommended to avoid mistakes and leave no scope for penalties. Who can Become a Registered Valuer Under IBC? Here we have discussed the experience needed to register as a Registered Valuer under the IBC, as outlined in Rule 4 of the Companies (Registered Appraisers and Valuer) Rules, 2017: 1. Registration Must be registered as an appraisal member with a registered appraisal organization. 1. Valuation Examination Must pass the Valuation Examination conducted by the IBBI. However, the Companies Rules, 2017, do not require passing the examination test if certain conditions are met. 2. Experience for Age 50 or More If aged 50 or more, must have been involved in appraising assets valued at ₹5 crores or more. 3. Postgraduate Qualification Must have a postgraduate degree or equivalent with 3 years of post-qualification experience. 4. Professional Institute Membership Must be a member of a professional institute with 3 years of post-qualification experience after obtaining membership. 5. Company or Partnership Registration Any registered company or partnership is also considered a registered valuer under the Insolvency and Bankruptcy Code, 2016. Types of Valuations in the IBC Process Valuation is essential in the Insolvency and Bankruptcy Code (IBC) process in India, as it helps determine the worth of the assets and liabilities of a company going through insolvency proceedings. Here are the main types of valuation used in the IBC process: 1. Fair Market Value (FMV) FMV refers to the cost at which an asset would be exchanged in a competitive auction among informed, willing participants. It is frequently utilized to evaluate the worth of assets during the IBC proceedings. 2. Liquidation Value It refers to the approximate sum that could be acquired by liquidating the company's assets when a forced sale is necessary. The liquidation value accounts for the forced sale of assets and is typically lower than the Fair Market Value (FMV). 3. Enterprise Value It represents a company's total worth, encompassing its equity and debt. It is utilized to assess the total worth of the company rather than separate assets. 4. Value of Discounted Cash Flow (DCF) This technique includes estimating the company's future cash flows and adjusting them to the current value by applying a suitable discount rate. It aids in determining the company's true worth by considering its projected future results. 5. Valuation based on assets After deducting debts, this approach values a corporation by assessing the worth of its specific assets, like land, equipment, and stock. What are the Methods for IBC Valuation? Having a format of valuation report under IBC is crucial. There are certain methods for calculating the IBC valuation, such as: 1. Fair Value Method The fair value method is the amount exchanged in a transaction between willing market participants for the sale of an asset or transfer of a liability at the measurement date. This approach considers the market situation and the state of the asset. It also mirrors the market worth and offers a practical assessment. 2. Comparable Company Analysis This method includes evaluating the subject company's assets by comparing them to assets of similar recently sold companies. Market multiples from similar transactions are utilized to derive the information. It typically mirrors similar patterns seen in the market. 3. Liquidation Value Method Liquidation value is the approximate sum that can be quickly obtained by selling an asset, usually in a distressed situation. Because of the need to sell quickly, the price is below the fair value. Estimating recoveries in a forced sale scenario is highly beneficial. Our IBC valuation consultants are here to transform your valuation experience and complete the work within your desired time frame. What is the Valuation Process Under IBC? The IBC lays out a systematic method for performing the valuation process such as: 1. Appointment of Registered Valuers The resolution professional chosen to supervise the insolvency procedure picks two registered valuers who are experts in valuing the corporate debtor's particular assets. 2. Physical Verification and Valuation The designated appraisers comprehensively inspect the assets. Next, they use recognized global valuation methods to calculate each asset's fair value and liquidation value, taking into account market data and financial information. 3. Finalization & Reconciliation Suppose there is a large discrepancy in the initial valuations from the two appraisers; a third licensed appraiser can be involved for further evaluation before reaching a final decision. Ultimately, the fair value and liquidation value are determined by averaging the two nearest guesses. 4. Valuation Report under IBC The registered valuer compiles an extensive valuation report detailing the complete process. This valuation report under IBC contains information on the valuation method utilized, critical assumptions considered, and the rationale behind the final value assessments. What are the Valuation Standards of IBC? Valuation standards are regulated by the Insolvency and Bankruptcy Board of India (IBBI) under the Insolvency and Bankruptcy Code (IBC). Accredited valuers are obligated to these standards, which address fair and liquidation values, necessitate thorough, impartial reports, and demand disclosure of conflicts of interest. Frequent updates ensure these standards remain in line with market conditions and regulations. What are IBC Services? IBC services cover a diverse range of services offered by business consulting and legal compliance management firms to reduce the complexities of the insolvency process. Corporate valuation services are beneficial for the business ventures as these services helps in building investor trust. Our IBC services cater to stakeholders involved in insolvency proceedings- For Corporate Debtors Pre-insolvency Advisory Insolvency Resolution Process Strategic IBC Advisory For Creditors Claim Submission and Verification Committee of Creditors Representation Recovery Maximization For Investors and Acquirers Comprehensive Due Diligence on Insolvent Companies Bid Preparation Post-acquisition Integration Other IBC Services Valuation and Asset Management Legal and Regulatory Compliance Strategic Debt Restructuring Why Choose Enterslice for IBC Valuation? Streamline and simplify your IBC valuation journey with our IBC consultants! Our modern methodology simplifies the valuation process, transforming it from a complex challenge into a strategic advantage for your business. Our team of experts ensures a smooth and efficient experience, delivering accurate valuations that elevate your company’s value and prospects. Discover how Enterslice can enhance your IBC valuation with our unmatched expertise and support. Conduct thorough valuations to determine precise value and growth potential 15+ Years of Experience in IBC Valuation 50+ IBBI Registered Valuers with Proven Track Record Ensure accurate and reliable valuations with strong analytical methodologies. Expand your financial insights with our expertise in international valuation standards. Enhance your business’s market value with a comprehensive IBC valuation. Benefit from seamless compliance management Get an edge with our hassle-free business valuation services Success Rate of 96% in Delivering Accurate Valuations
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