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Which valuation report do you actually need?

Which valuation report you need is determined by the law compelling it, not by your company or the asset. A Companies Act valuation needs an IBBI Registered Valuer. An Income-tax valuation needs a SEBI-registered Category I Merchant Banker. Commissioning the wrong one means a rejected filing and a second valuation. Answer a few questions and find out which applies.

Where are you in the raise?
When the investment lands, does the money go into the company's bank account, or into a shareholder's personal account?

This tells us whether the company is issuing new shares, or an existing shareholder is selling theirs.

Is any investor based outside India, or an Indian entity with foreign ownership?
Have you already allotted any shares without a valuation report?

If so we should talk before you buy anything — this may need fixing rather than planning.

Do you already have an ESOP scheme in place, or are we creating one?
Is the company giving or lending money to anyone to buy the company's own shares?

This catches trust funding even where it isn't described as a trust.

Have you given, or will you give, shares to anyone for their work, know-how or IP rather than for cash?
Will any employee actually exercise their options this financial year?

About this tool

How does the tool decide which report I need?

It follows the same routing logic we use for real engagements. The requirement is driven by the purpose of the valuation — which law compels it — not by the asset, the company, or which professional happens to be available. Companies Act valuations need an IBBI Registered Valuer; Income-tax valuations need a SEBI-registered Category I Merchant Banker; FEMA pricing accepts a CA, Merchant Banker or Cost Accountant.

Why does it ask where the money goes rather than whether it's a primary or secondary?

Because founders answer the first question correctly almost every time and the second one incorrectly a meaningful share of the time. Money into the company's account means new shares are being issued; money into a shareholder's personal account means someone is selling shares they already hold. Those two situations need different reports.

Can I rely on this for my filing?

No. It gives you the likely requirement so you know what to ask for and roughly what it will cost. Before anything is commissioned we confirm the requirement against your actual documents — a cap table, a term sheet, or a scheme document frequently shows something the answers did not.

Is my information stored?

No. The tool runs entirely in your browser. Nothing is sent to us unless you choose to contact us afterwards.

What if I need more than one report?

That is common and not a sign anything has gone wrong. A priced round with a non-resident investor needs a Registered Valuer report for the ROC filing and a FEMA pricing certificate. A company running an ESOP alongside a raise may need a Merchant Banker certificate as well. The tool shows every requirement it identifies.

Related

Reviewed by

Written by the Lekha Advisory editorial team and checked by independent professionals against their own areas of registration.

Bhawna Piplani

Advocate-on-Record (Supreme Court of India), Company Secretary, IBBI Registered Valuer (Securities or Financial Assets)

Advocate-on-Record before the Supreme Court of India, Company Secretary, and IBBI Registered Valuer in the Securities or Financial Assets asset class, registered in December 2022. Founder of Piplani & Associates, practising in corporate and legal advisory, intellectual property, mergers and acquisitions, and valuation. NCLT practitioner and Registered Trademark Attorney.

Registered with: Supreme Court of India · ICSI · IBBI

Kaushal Arora

Chartered Accountant, MBA (Finance & Strategy)

Chartered Accountant with over 20 years across venture capital, financial advisory and fund operations. Currently CFO of a SEBI-registered Category I AIF, covering fund structuring, valuations, investor reporting, and SEBI, RBI, FEMA and taxation compliance. Has advised over 100 startups on capital raising, financial modelling and valuation using DCF, comparable transactions and scenario analysis.

Registered with: ICAI

Reviewers check factual accuracy against their own areas of registration. Lekha is not a firm of Chartered Accountants; statutory work is performed by independent registered professionals under their own engagement letters.

Primary sources

This page states the position under the following instruments. Where a figure differs from other published guidance, the instrument governs.

  1. Companies Act 2013 s.62(1)(c) with Rule 13(1); Rule 16(1)(c); Rule 8, Companies (Share Capital and Debentures) Rules 2014
    Effective . Requires a valuation report from an IBBI Registered Valuer for preferential allotment, ESOP trust funding, and sweat equity.
  2. SEBI (Merchant Bankers) (Amendment) Regulations 2025, notification SEBI/LAD-NRO/GN/2025/282 dated 3 December 2025
    Effective . Restricted fresh valuation engagements to merchant bankers holding registration for valuation-related activities from 2 January 2026, with in-flight assignments completable within nine months (approximately 2 October 2026).
  3. Finance Act 2024 — omission of Section 56(2)(viib)
    Effective . Abolished Angel Tax for all classes of investor, resident and non-resident. The Income-tax Act 2025 did not reintroduce an equivalent. Not retrospective — earlier assessment years remain open.

Accuracy and review history

Last verified on against 4 primary instruments.

Verified against: DPIIT Notification G.S.R. 108(E) dated 4 February 2026; Finance Act 2024 — omission of Section 56(2)(viib); SEBI (Merchant Bankers) (Amendment) Regulations 2025, notification SEBI/LAD-NRO/GN/2025/282 dated 3 December 2025; Income-tax Act 2025

  • DPIIT turnover ceiling corrected from ₹100 crore to ₹200 crore (₹300 crore for Deep Tech) per G.S.R. 108(E).
  • Deep Tech category added — 20-year recognition window.
  • Cooperative Societies added to eligible entity types.
  • Angel Tax content rewritten: Section 56(2)(viib) abolished with effect from 1 April 2025, so it is no longer a reason to obtain a merchant banker valuation or DPIIT recognition.
  • Registered Valuer requirement under Section 62(1)(c) added where previously only a merchant banker was described.
  • Merchant banker eligibility updated for the SEBI 2025 valuation-activity restriction.
  • Income-tax Act 2025 renumbering noted alongside 1961 Act citations.
  • DPIIT processing times corrected to 7–14 days (straightforward) and 2–8 weeks (complex), from operational experience.