IBBI UNVEILS LANDMARK REFORMS TO TRANSFORM VALUATION AND DISCLOSURE STANDARDS UNDER THE INSOLVENCY AND BANKRUPTCY CODE

PRESS RELEASE No. IBBI/PR/2026/2 ON 26th February, 2026

New Delhi, 26 February 2026: In a significant move poised to redefine the valuation landscape under India’s insolvency regime, the Insolvency and Bankruptcy Board of India (IBBI) has announced sweeping structural reforms aimed at strengthening the valuation and information disclosure framework under the Insolvency and Bankruptcy Code, 2016 (IBC).

The reforms mark one of the most comprehensive overhauls of the valuation ecosystem since the inception of the Code and are expected to substantially enhance transparency, credibility, and comparability in insolvency valuations.

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Structural Reforms: A New Era for Valuation Practice

Recognising that valuation lies at the heart of commercial decision-making in insolvency processes—directly influencing resolution outcomes, liquidation decisions, and stakeholder recoveries—the IBBI has introduced four transformative measures:

1. Standardised Valuation Reports and Documentation

In a move set to reduce ambiguity and disputes, registered valuers will now be required to prepare valuation reports and maintain documentation strictly in accordance with formats notified by the Board through circulars.

This standardisation is expected to:

• Promote uniform disclosures

• Improve auditability

• Reduce litigation risks

• Enable comparability across cases

For the valuation profession, this marks a decisive shift toward structured, compliance-driven reporting.

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2. Harmonised Valuation Standards Across All Insolvency Processes

The reforms mandate that fair value and liquidation value must be computed in accordance with valuation standards notified by the Board.

By introducing a single harmonised valuation standard applicable across all insolvency processes—irrespective of their nature—the IBBI aims to ensure:

• Greater consistency in outcomes

• Enhanced reliability

• Stronger professional discipline within the valuation ecosystem

This harmonisation is expected to eliminate interpretational variations that have historically led to valuation divergences.

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3. Redefined ‘Fair Value’ to Capture Synergies and Intangibles

In a progressive and economically aligned amendment, the definition of “fair value” has been expanded to explicitly recognise:

• Tangible assets

• Intangible assets

• Underlying business synergies

This ensures that valuation reflects enterprise-level worth, rather than mere asset break-up value. By incorporating going-concern attributes and synergy benefits, the framework now better aligns with modern valuation theory and market realities.

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4. Introduction of a “Coordinating Valuer”

Perhaps the most structurally significant reform is the introduction of a “Coordinating Valuer” framework.

Among the appointed registered valuers, one will be designated to ensure that enterprise-level considerations—including synergies and going-concern elements—are properly integrated into the fair value estimation.

This mechanism is expected to:

• Improve coherence in multi-valuer assignments

• Strengthen robustness of valuation outcomes

• Enhance stakeholder confidence

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Strengthened Information Disclosure: Reducing Asymmetry

Alongside valuation reforms, the IBBI has significantly enhanced disclosure requirements within the Information Memorandum (IM) to reduce information asymmetry and improve resolution efficiency.

Protection of Allottees and Homebuyers

The IM must now disclose details of all allottees—including names, amounts due, and units allotted—whose claims are reflected in company books or in records of the Real Estate Regulatory Authority, even if they have not formally submitted claims.

Further, resolution plans must provide for the treatment of such allottees.

This reform is expected to:

• Promote equitable treatment

• Prevent post-approval disputes

• Protect homebuyer interests

• Strengthen plan implementation certainty

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Expanded Disclosure Requirements

The IM must also now include:

• Detailed receivables (trade, inter-corporate, and contractual)

• Information on joint development agreements and co-development arrangements

• Details of assets under attachment by enforcement agencies, including status of proceedings

These disclosures are aimed at ensuring that resolution applicants have access to comprehensive and reliable data, thereby improving bid quality and resolution outcomes.

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A Defining Moment for the Valuation Profession

The reforms signal the regulator’s clear intent to professionalise and institutionalise valuation practices under the IBC framework. By combining standardisation, harmonisation, enterprise-level value recognition, and enhanced disclosure, the IBBI has laid the foundation for a more mature, transparent, and globally aligned insolvency ecosystem.

For registered valuers, insolvency professionals, lenders, and resolution applicants alike, these changes represent not merely regulatory amendments—but a structural recalibration of how value is determined, disclosed, and realised under India’s insolvency framework.

The amended regulations are available on the official website of the Insolvency and Bankruptcy Board of India.

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This development is widely regarded as one of the most consequential regulatory interventions in the valuation domain since the implementation of the Insolvency and Bankruptcy Code, 2016—strengthening trust, professionalism, and value maximisation in India’s insolvency ecosystem.

OTHER IMPORTANT NOTIFICATIONS ISSUED ON 25-02-2026 ARE AS LISTED AS UNDER:-