Valuation Services Under SEBI Regulations
Comprehensive valuation solutions for Preferential Allotments, Open Offers, and Delisting. Expert compliance for Listed Companies by SEBI-Registered Merchant Bankers and IBBI Registered Valuers.
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What is SEBI Valuation?
Valuations Under SEBI (Securities and Exchange Board of India) are specialized assessments required for companies listed on Indian Stock Exchanges (BSE/NSE). These valuations are governed by strict formulas and transparency norms designed to protect the interests of public shareholders. Unlike private valuations, SEBI-mandated reports must strictly keep to specific regulations such as ICDR, SAST (Takeover Code), and Delisting Regulations.
At Biz Valuations, we provide the technical precision required for the public markets. We ensure that every calculation - from the Volume Weighted Average Price (VWAP) to the Fair Value of unlisted subsidiaries - is audit-ready and compliant with the latest SEBI circulars. We help listed entities navigate the complex intersection of market pricing and fundamental valuation.
Why You Need SEBI-Compliant Valuation
In the regulated environment of the stock exchange, a valuation report is a mandatory disclosure for major corporate actions. We provide specialized reports for:
Preferential Issues (ICDR)
Determining the floor price for the issuance of shares or convertible securities to a select group of investors.
Open Offers (SAST)
Calculating the "Fair Price" for an exit opportunity to public shareholders during a change in control or substantial acquisition.
Delisting of Shares
Providing the Floor Price and aiding in the Reverse Book Building (RBB) process for companies exiting the stock exchange.
Related Party Transactions (RPT)
Providing independent valuation to ensure that transactions with promoters or group companies are at Arm’s Length.
Buybacks
Determining the fair value and premium for the repurchasing of shares from the open market or through a tender offer.
Who Needs SEBI Valuation Services?
Expert Solutions for Listed Entities & Market Intermediaries
Our team provides specialized support to participants in the capital markets:
Key Benefits of Working with Biz Valuations
The stakes are highest in the public domain, where a minor error can lead to SEBI show-cause notices or trading suspensions.
Key SEBI Regulations Covered
We provide specialized expertise across the primary regulatory pillars:
Our Valuation Methodologies
Under SEBI norms, the methodology is often dictated by whether the shares are "Frequently Traded" on the exchange:
Market Price Method (VWAP)
Calculating the Volume Weighted Average Price over specific look-back periods (e.g., 90 days or 10 days).
Comparable Companies Multiple (CCM)
Used primarily for infrequently traded shares or the valuation of unlisted subsidiaries.
Discounted Cash Flow (DCF)
Providing a "Fundamental Value" that acts as a check against market sentiment.
Negotiated Price
Analyzing the price agreed upon in the Share Purchase Agreement (SPA) to ensure it isn't lower than the regulatory floor.
The "Fairness Opinion" Requirement
For schemes of arrangement, such as Mergers or Demergers involving listed companies, SEBI mandates an additional layer of scrutiny.
- Independent Review: We provide an independent "Fairness Opinion" on the Share Swap Ratio.
- Merchant Banker Mandate: Only a SEBI-Registered Category-I Merchant Banker can issue this opinion.
- Board & Shareholder Protection: This opinion certifies that the transaction is financially fair to the public minority shareholders.
Our 4-Step SEBI Compliance Roadmap
1. Regulatory Mapping
Determining which SEBI regulation triggers the valuation (e.g., ICDR for Preferential Issue or SAST for Takeover).
2. Trading Volume Analysis
Checking the stock’s liquidity on BSE/NSE to decide if it is "Frequently Traded."
3. Pricing Computation
Applying the specific look-back period formulas (VWAP) and fundamental methods (DCF/Market).
4. Reporting & Disclosure
Issuing the final report and, if required, the Fairness Opinion for submission to the Stock Exchanges.
Specialized Stock Exchange Services
We explore the unique challenges of listed company valuations:
Valuation of "Infrequently Traded" Shares
Applying the "Fair Value" principles using DCF and Peer Multiples when market prices are unreliable.
Control Premium Assessment
Determining the appropriate premium for a change in management control during an acquisition.
Price Sensitive Information (UPSI) Protocols
We maintain strict data silos and NDAs to ensure valuation work does not lead to insider trading risks.
Inter-Regulatory Alignment
Ensuring the SEBI valuation also satisfies Income Tax (Rule 11UA) and Companies Act requirements.
Navigate the Capital Markets with Precision
In the world of Stock Exchanges, compliance is your reputation.
Partner with Biz Valuations for SEBI-compliant reports that ensure technical accuracy and set the gold standard for market transparency.
- Built on Experience
- Trusted Across 1,600+ Projects
- Confidence of Leading Businesses
Frequently Asked Questions (FAQs)
1What is the 'Floor Price' in a SEBI Preferential Issue?
It is the minimum price at which a listed company can issue shares, usually calculated as the higher of the 90-day and 10-day Volume Weighted Average Price (VWAP).
2Who is authorized to value 'Infrequently Traded' shares?
According to SEBI, infrequently traded shares must be valued by a SEBI-Registered Merchant Banker or an IBBI Registered Valuer taking into account NAV, PE multiples, and other parameters.
3What is the 'Takeover Code' (SAST) valuation?
If an acquirer triggers an Open Offer, they must offer to buy public shares at a price not lower than the Fair Price determined by specific SEBI guidelines.
4Is a Fairness Opinion mandatory for a Merger?
Yes. For any scheme of arrangement involving a listed company, a Fairness Opinion from an independent Merchant Banker is mandatory.
5What are 'Frequently Traded' shares?
Shares are frequently traded if the annualized trading turnover on a stock exchange is at least 10% of the total number of shares during the preceding six months.
6Can a listed company issue shares below the Market Price?
No. SEBI regulations generally prevent the issuance of shares below the calculated Floor Price to protect against the dilution of public shareholder value.
7How is the 'Fair Value' determined for Delisting?
The floor price is determined by the valuer, but the final exit price is often decided through a Reverse Book Building process where shareholders bid for their exit price.
8What is the 'Volume Weighted Average Price' (VWAP)?
VWAP is a trading benchmark that gives the average price a stock has traded at throughout the day, based on both volume and price.
9Does SEBI require a valuation for Related Party Transactions?
For "Material" Related Party Transactions, the Audit Committee and shareholders often require an independent valuation report to confirm the transaction is at Arm’s Length.
10How long does a SEBI-compliant valuation take?
Due to the data-heavy nature of market price analysis, these typically take 5 to 7 business days.