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    Requirement of Valuation Report and CA certificate in case of Private Placement

    Posted By : ARUN GANDHI / Published on : 19-Sep-2022 06:23 AM / View : 3244 / Comment : 4

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    Hi All,

    In the case of a private placement which is also a downstream investment as per FEMA. We have taken valuation from Regd. Valuer + CA which is 5 months old... shareholders approved the private placement basis of this valuation and the same is filed with ROC.

    In RBI filing the said valuation report being old than 90 days we may expect rejection from RBI and in such case, we may take another valuation with the current date only for filing purposes.

    Please let me know if there is anything wrong with this practice. In my view, we don't need to link the valuation requirements of both laws. And can have separate valuations filed with different authorities. Please advise.
    Read more on : private placement case certificate valuation report requirement

    • In case of a private placement that is also a downstream investment as per FEMA, the valuation report must be conducted by a registered valuer as per the regulations. In addition, it is advisable to also take the opinion of a Chartered Accountant (CA) to ensure that the valuation is in accordance with the generally accepted accounting principles.

      Regarding the validity of the valuation report, as per the Securities and Exchange Board of India (SEBI) regulations, the valuation report must not be older than six months from the date of the offer letter. Therefore, if the valuation report is five months old and the private placement offer letter is yet to be issued, then the valuation report is still valid.

      However, if the private placement offer letter has already been issued and the six-month validity period has expired, then a fresh valuation report would be required. In this case, the company should engage a registered valuer to conduct a fresh valuation and issue a new report that is not more than six months old from the date of the offer letter.

      It is important to ensure that all the regulatory requirements related to private placements and downstream investments are met to avoid any legal or compliance issues in the future.

      13-04-2023 / 11:55:09 AM
      Reply
    • Hi Shriti,

      Can you please share the relevant regulation or article for the below para

      Regarding the validity of the valuation report, as per the Securities and Exchange Board of India (SEBI) regulations, the valuation report must not be older than six months from the date of the offer letter.

      16-08-2023 / 12:15:32 PM
      Reply
    • Some SEBI Guidelines provides the time limit on use of valuation report and frequency of valuation. 

      validity_of_Valaution_Report_ccl1.pdf

      22-08-2023 / 11:26:24 AM
      Reply
    • Validity of the valuation report as per companies act?

      20-09-2023 / 01:05:19 AM
      Reply
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