When does an Indian company need a business or share valuation?

You typically need a valuation for equity fundraising and FDI pricing, ESOP grants and exercises, M&A and secondary transactions, Section 92 (formerly section 56(2)(x)) gift tax assessments, buy-back of shares, court-approved schemes and financial reporting (Ind AS / impairment).

Who can sign a valuation report in India?

Under Section 247 of the Companies Act, 2013 a valuation under that Act must be signed by a Registered Valuer registered with IBBI in the relevant asset class. For unquoted shares under income tax (Rule 11UA) a Chartered Accountant or merchant banker may sign, and for FEMA pricing of shares issued to or transferred from a non-resident the valuation can be done by a SEBI-registered merchant banker or a Chartered Accountant using an internationally accepted pricing methodology.

Which valuation methods do you use?

We use Discounted Cash Flow (DCF) for going concerns with reliable forecasts, Net Asset Value (NAV) for asset-heavy or wind-down situations, and Comparable Companies / Comparable Transaction multiples for benchmarking. The choice of method is driven by the purpose of the valuation, the stage of the business and the regulation that applies.

Is angel tax still applicable to startups?

Section 56(2)(viib) — commonly called the angel tax — was abolished with effect from Assessment Year 2025-26. Section 92 (formerly section 56(2)(x)) (gift / under-value receipt) continues to apply to recipients of shares and other property below fair market value, so a defensible valuation remains important.

Rule 11UA of the Income Tax Rules prescribes how to compute the fair market value of unquoted equity shares and other unquoted securities for income-tax purposes — including the NAV method and, in specified cases, a DCF certified by a Chartered Accountant or merchant banker.

Valuation

Relevant for:For SMEs For Founders

Business Valuation Services in India — Company, Share & Startup Valuation

Our business valuation services in India are for founders, promoters and boards that need a company valuation, share valuation or startup valuation. A business valuation is a written, defensible opinion on the fair value of a company or its securities — used for fundraising, FDI / ODI pricing, ESOPs, M&A, Section 56(2)(x), buy-back, court schemes and financial reporting. We deliver valuations that match the regulation behind the transaction, signed by the right professional under the Companies Act, the Income Tax Rules or FEMA. Key takeaways: choice of signatory depends on the purpose; methods are DCF, NAV and comparables; Section 56(2)(viib) is abolished from AY 2025-26 but Section 92 (formerly section 56(2)(x)) still applies.

Book a 15-min Call Contact Us

What's Included

Fair value opinion on equity shares, preference shares or the business as a whole

DCF model with explicit forecast, terminal value and WACC build-up

Net Asset Value (NAV) computation under Rule 11UA where required

Comparable companies and comparable transaction multiples analysis

Valuation report aligned to the regulation (Companies Act / Rule 11UA / FEMA)

ESOP grant-date and exercise-date valuations

Swap-ratio reports for mergers, demergers and amalgamations

Independent second-opinion review of an existing valuation report

Our Process

STEP 1

Purpose & scope

Confirm transaction, regulation, valuation date and the standard of value.

Week 1

STEP 2

Information request

Share financials, projections, cap table, customer / pipeline data and asset register.

Week 1

STEP 3

Method selection

Select DCF, NAV or comparables (or a weighted combination) appropriate to the purpose.

Week 1–2

STEP 4

Build & review

Build the model, benchmark against comparables, sensitivity and management discussion.

Week 2–3

STEP 5

Report & sign-off

Issue the signed report; respond to investor, auditor or regulator queries.

Week 3

Documents Required

Audited financials for the last 3 years and latest management accounts
Three to five year financial projections with key assumptions
Cap table, share certificates and shareholders' agreement
Fixed-asset register and details of investments
Term sheet or transaction document driving the valuation
Existing debt, ESOP pool and contingent liabilities

Key Statutory References

Item	Reference
Companies Act, 2013	Section 247 — valuation by a Registered Valuer (IBBI) for matters under the Act
Income Tax Rules	Rule 11UA — fair market value of unquoted equity shares (NAV and DCF)
Income Tax Act	Section 92 (formerly section 56(2)(x)) continues; Section 56(2)(viib) abolished from AY 2025-26
FEMA	Shares issued to / transferred from a non-resident at not less than fair value by an internationally accepted method (CA or merchant banker)

Monthly on LinkedIn

The CFO Desk

One finance problem a month for SME owners, and for Gulf and overseas owners running teams in India, with what fixes it.

Subscribe on LinkedInKnow an owner who would find this useful? Send them smeadvisory.in/cfodesk.

Frequently Asked Questions

Related Services

Investor Readiness SME IPO Advisory ESOP Advisory Financial Modeling Family Office

Guides & Resources

Startup Valuation Basics for Indian Founders

Methods and what really drives multiples in India.

Read →

Investor Due Diligence Checklist

What buyers and investors test in your valuation.

Read →

Get a defensible valuation, signed by the right professional

Book a 15-minute advisory call with Regi Tom Antony.

Book 15-min Call Contact Us

Scope of services and important information

This page describes services offered by RTA & Associates, Chartered Accountants. It is published for general information and does not constitute tax, legal, financial or investment advice, nor an offer or solicitation to provide services in any jurisdiction where we are not qualified to do so.

Any engagement is governed by a separate written engagement letter, which sets out the scope of work, the deliverables, the fees and the limits of our responsibility. Nothing on this page forms part of that engagement or varies its terms.

Descriptions of timelines, processes, costs and outcomes are indicative and depend on your specific circumstances and on third parties — regulators, exchanges, banks and counterparties — whose timelines we do not control. Statutory and regulatory requirements change; the current position should be confirmed before you act.

We are Chartered Accountants. Where a matter requires legal advice, advice on the law of a country other than India, or a regulated investment recommendation, we will say so and you should take advice from an appropriately qualified and licensed adviser in the relevant field and jurisdiction.