The proposal comes at a time when stressed firms worth tens of thousands of crores are up for grabs under the IBC but there are no uniform standards for valuing these assets, nor is there a proper regulatory framework governing the valuation profession. Proper valuation of a company is also an important part of any merger and acquisition.
“A critical element towards achieving the objectives (under the IBC) is the transparent and credible determination of the value of assets to facilitate comparison and informed decision-making by the committee of creditors. This proves that valuation is a core factor in achieving the objectives of the IBC in the resolution and liquidation of assets,” the ministry said.
Last month, Insolvency and Bankruptcy Board of India (IBBI) chairman Ravi Mittal had pitched for a globally-accepted, “well-structured and comprehensive standards framework” for the valuation of stressed firms under the IBC.
The MCA’s plan comes at a time when analysts are increasingly questioning IBC’s efficacy in ensuring timely resolution or preventing erosion of stressed asset value. The recovery from the insolvent firms resolved until June stood at ₹2.92 lakh crore, or just 31.6% of their admitted claims.
