Valuation of companies is an important process that determines the worth of a business. It helps stakeholders to make informed decisions about the company’s worth and its potential for future growth. Under the Companies Act 2013 and SEBI Rules and Regulations, valuation of companies is required in certain circumstances.

Whether it is a private, public or listed company, a company must be valued in order to determine its fair value. Under the Companies Act 2013, valuation of a company is required for the purpose of buy-back of shares, issue of capital, issue of bonus shares, increase in authorized capital, transfer of shares, and for determining the value of shares for the purpose of determining the value of consideration for the transfer of a company or during Initial Public Offering (IPO). 

The valuation of a listed company must also be done in accordance with the regulations of SEBI. The valuation of a listed company is required for the purpose of allotment of shares and debentures, buy-back of shares, issue of bonus shares and for the purpose of determining the fair value of consideration for the transfer of a company, during mergers or acquisitions.  

The valuation process must be done by a competent and qualified valuer who is a member with the (Insolvency and Bankruptcy board of India) IBBI registered Valuers Organization. The valuer must be independent and should not have any kind of interest in the company.

The valuation must be done as per the regulations of SEBI and the Companies Act 2013 and the valuation report must be submitted to the concerned authorities. The valuation must be fair and reasonable and must be based on the market conditions, the prospects of the company, the financial position of the company and its financial performance.