The Insolvency and Bankruptcy Board of India, through the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2026, has introduced amendments to the regulatory framework governing the Corporate Insolvency Resolution Process. The amendments were notified in the Official Gazette vide Notification No. F. No. IBBI/2025-26/GN/REG135 dated 25 February 2026. These changes focus on refining the valuation mechanism applicable during insolvency proceedings and aim to enhance procedural clarity, consistency, and transparency within the resolution process, thereby facilitating more reliable valuation outcomes and maximisation of distressed asset value.
The amendments have been issued by the Insolvency and Bankruptcy Board of India in exercise of the powers conferred under section 196 read with section 240 of the Insolvency and Bankruptcy Code, 2016, and they amend the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The regulatory update primarily focuses on the framework governing valuation of the corporate debtor and the procedure to be followed in cases where significant variations arise between valuation estimates submitted by registered valuers.
One of the key changes introduced by the amendment concerns the definition of “fair value.” The revised regulatory formulation clarifies that fair value refers to the estimated realizable value of the assets of the corporate debtor if they were to be exchanged between a willing buyer and a willing seller on the insolvency commencement date, in an arm’s-length transaction, after appropriate marketing, and where both parties act knowledgeably, prudently and without compulsion. This clarification strengthens the conceptual understanding of fair value within the insolvency framework by emphasizing the market-based nature of the valuation process.
The amendment further introduces an important clarification with respect to the determination of fair value by valuers. It provides that the coordinating valuer of a set shall compute the fair value of the corporate debtor after taking into account the valuation of assets determined by the registered valuers in that set along with the synergies that may exist between such assets. By explicitly recognising the relevance of asset synergies in determining fair value, the amendment ensures that valuation reflects the integrated economic value of the corporate debtor rather than a mere aggregation of individual asset values.
Another significant regulatory refinement relates to the mechanism for addressing discrepancies in valuation reports. The amended framework permits the appointment of a third set of registered valuers in circumstances where the fair value or liquidation value estimated by the initially appointed valuers shows a significant variation. For the purposes of this provision, a difference of twenty-five percent or more between the valuation estimates is treated as a material divergence. In such cases, the resolution professional may appoint an additional set of registered valuers, and the Committee of Creditors may also propose such appointment, provided that the reasons for doing so are recorded in writing. This mechanism introduces a structured approach for resolving valuation inconsistencies and ensures that the valuation process remains credible and reliable.
Through these amendments, the regulatory framework governing valuation during the Corporate Insolvency Resolution Process now incorporates a clearer methodology for determining fair value and establishes a defined procedure for dealing with substantial differences between valuation estimates. The inclusion of provisions relating to asset synergies and the appointment of additional valuers strengthens the robustness of the valuation process and reduces the likelihood of disputes arising from inconsistent valuation outcomes.
Conclusion
The IBBI (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2026, therefore, represent a focused regulatory update directed specifically at improving the valuation framework within CIRP. By clarifying the definition of fair value, recognising the importance of asset synergies in valuation, and introducing a mechanism for addressing significant discrepancies between valuation reports, the amendments seek to ensure that the insolvency resolution process operates with greater accuracy, transparency, and procedural certainty in the determination of the value of the corporate debtor
Expositor(s): Adv. Jahnobi Paul
