Question 1

When is a registered valuer's report legally required?

Accepted Answer

Under the Companies Act, an IBBI-registered valuer's report is required for matters such as share issues/transfers under section 62, schemes of arrangement, non-cash consideration, and certain related-party and insolvency transactions. FEMA, the Income-tax Act and SEBI prescribe valuation in their own contexts too.

Question 2

What valuation methods do you use?

Accepted Answer

We apply the income approach (discounted cash flow), the market approach (comparable companies and transactions) and the cost/asset approach, selecting and weighting them based on the asset, stage and purpose. The chosen method must also satisfy the specific regulation under which the valuation is required.

Question 3

What does financial due diligence cover?

Accepted Answer

Financial DD validates quality of earnings, normalised EBITDA, working-capital trends, debt and debt-like items, contingent liabilities, tax exposures and the reliability of management information — giving the acquirer a defensible basis for price, the SPA's representations and the net-debt/working-capital adjustments.

Question 4

What is the difference between an asset deal and a share deal?

Accepted Answer

In a share deal the buyer acquires the company with all its assets and liabilities (and tax history); in an asset/business-transfer deal the buyer cherry-picks identified assets and liabilities, often via a slump sale. The choice has materially different tax, stamp-duty, consent and liability consequences, which we model up front.

Question 5

How is a slump sale taxed?

Accepted Answer

A slump sale — transfer of a business undertaking for a lump-sum consideration without values assigned to individual assets — is taxed as capital gains on the difference between consideration and the undertaking's net worth, with the holding period determining short- or long-term treatment. The 2021 amendment requires fair-value-based consideration.

Question 6

What is a fairness opinion and who needs one?

Accepted Answer

A fairness opinion is an independent assessment of whether the financial terms of a transaction are fair to a particular party (often minority shareholders or the board). Listed-company schemes and certain related-party transactions rely on them for governance and SEBI/stock-exchange purposes.

M&A, Valuation & Transaction Advisory

M&A, Valuation & Transaction Advisory services

M&A / Deal Advisory

Due Diligence

Valuation (IBBI-registered)

Valuation Engagements

IBBI Registered Valuation

Deal Structuring & Advisory

Debt & Capital Raising

NCLT Scheme Execution

Take the next step with a free tool or guide

Statutory Audit Prep Checklist

Selected m&a, valuation & transaction advisory engagements

M&A, Valuation & Transaction Advisory — frequently asked questions

Related practices

Industries we serve here

Speak to our M&A, Valuation & Transaction Advisory team