A Discussion of the Business Valuation Industry in India

Panellists Predict Growth Market for Business Valuations

We had the opportunity to discuss the Indian business valuation profession with three firms providing cross-border business valuation services from Indian offices: Bharat Ramnani, Director – Valuation Services for Aranca; Aroop Cherian, founder of Cherian Advisors; and Bharat Kanodia, Founder of Veristrat. They shared their thoughts on the industry, markets and services, growth opportunities and professional education.

1. Can you discuss the state of the valuation industry in India?

Our panelists agreed that there are not any regulatory agencies in India with direct oversight of the valuation profession, nor any professional business valuation organizations. However, the Ministry of Company Affairs, and the Institute of Chartered Accountants of India (ICAI), and laws such as the Foreign Exchange Management Act, 1999 (FEMA) set procedures and standards in performing valuation engagements.

Aroop Cherian indicated that services provided include financial and tax reporting valuations, M&A, and valuation of financial instruments. Indian accounting standards are making a transition towards fair value for financial reporting, and have issued Indian AS 113 in 2011 http://www.mca.gov.in/Ministry/pdf/INDAS113.pdf. After delays in implementation, India is expected to embrace IFRS shortly, which will increase the scope of financial reporting valuation work in India. Tax reporting issues include transfer pricing, where The Foreign Exchange Management Act, 1999 lays down guidelines on valuation methodology to be considered as foreign entities invest in Indian companies.

Merger & Acquisition services may include help in acquisitions and raising funds for corporate finance, while additional valuation services are provided for private equity and hedge funds.

Further, Bharat Kanodia mentioned that “the introduction of the concept of Registered Valuer in the Companies Bill, 2011 has provided a framework to enable fair valuation in companies and thus, there will be a need for professional valuers to standardize the use of valuation practices in India, leading to transparency and better governance.”

Aroop Cherian further described the BV market segments as:

  1. “Big 4 consulting and audit firms with CPA equivalent professionals – operations are separate for professionals serving Indian clients (front-facing professionals) and non-Indian clients (back office operations).
  2. Back office operations for established firms in the United States and other regions.
  3. Third party operations that work independently with firms in the United States and other regions.
  4. Domestic independent appraisers – appraising real estate, property plant and machinery for collateral and transaction purposes.


2.What business valuation education is currently available in India?

There are no organized professional business valuation programs in India. Students take graduate level programs, or in-house valuation programs through their companies. It was interesting to note our interviewees stated a preference for in-class programs in India, versus on-line offerings.

As described by Bharat Ramnami, “Except a few basic short term courses provided by ICAI and Securities and Exchange Bureau of India (“SEBI”), there are not many professional development programs or university programs which provide thorough business valuation education. Given the lack of competent education programs relating to business valuations, there is a need and scope for organized education programs in India.”

3. Is there interest in national or international valuation designations, following initiatives in the US and elsewhere, particularly in financial reporting?

Our respondents believe the Chartered Financial Analyst® (“CFA”) designation is the most recognized business valuation brand in India.   As fair value becomes mandatory from a reporting standpoint, a professional valuation designation could become a major differentiator for firms providing valuation services.

The Reserve Bank of India (“RBI”) has specifically mandated through revised guidelines in 2014, that internationally acceptable pricing methodology should be utilized which should be duly certified by a Chartered Accountant or a Registered Merchant Banker. While that implies the majority of work in India should only be certified by CA’s or bankers, Bharat Kanodia further commented “different regulators in India such as RBI, taxing authorities, SEBI have prescribed different, and in some cases conflicting, valuation methodologies”

4. What is the size of the Indian valuation market, in terms of business valuers? How many firms are there in business valuation?

Firms providing business valuation services range from the Big 4, to medium-sized organizations and smaller firms. It appears that the majority of the business valuation business is performed by the Big 4 and medium-sized organizations. It’s difficult to measure the size of the market without a business valuation organization, although it’s believed there are several hundred business valuers in India.

5. The valuation industry in India includes a domestic and international market. Can you comment on each?

The valuation industry in India does have an international market. Private equity and hedge fund engagements include quarterly valuations for portfolios, which are business and equity valuations.   Many companies focus on 409A work, where, because of their significant value, Indian firms have had a major impact on this US market. IRC Section 409A is the tax code regarding stock option plans, where valuations assist in the issuance of options, particularly serving start-up firms on the West Coast. The service is the initial valuation, and annual updates. These valuations are often referred to as cheap stock engagements.

6. What are the growth opportunities for the industry?

Our panelists all believe that the Indian business valuation industry will grow significantly, especially domestically, given the acceptance of IFRS and fair value reporting in India, as well as in the global markets.

Bharat Ramnani, “Given the above mentioned amendments providing significant growth opportunities to the valuation industry, we expect a Compounded Average Growth Rate (CAGR) of about 20-25% over the coming five years.”

Interestingly, two of our panelists also provide valuation capabilities in other services, such as real estate and plant machinery, for the domestic and foreign markets.

Aroop Cherian, “There is immense opportunity for growth in this industry. We see professionals being exposed to a wider variety of opportunities – enhancing their professional and career growth chances.”

Regarding cross-border opportunities, all three panelists agree Indian appraisal firms have been able to integrate with firms in the US. Back office operations of companies in the US are ramping up operations as they maintain their cost arbitrage positions, while all these firms provide enhanced responsiveness and turnaround given the time zone differentials, and capability of working on client projects on a 24 hour basis. Services range from initial research and modelling, to outsourcing valuations while US valuers maintain client relations.

7. We like to ask our guests to share their travel stories worldwide. What’s your favorite travel story?

While all three panellists travel worldwide, we included Bharat Ramnani’s favorite story:

“All my travels across the world have been memorable and all of them have ‘stories’ linked to them but my favorite travel story was when I travelled to Malaysia’s Genting Highlands which have some of world’s best resorts and casinos. The fact that the entire property of Genting Highlands has been built by an idea of one single person on a vacant piece of land interested me the most.”


Aranca www.aranca.com is a global research, analytics and advisory firm empowering decision makers from Fortune 500 companies, financial institutions, and high potential start-ups with intelligence and insights to make better business decisions. Their expertise across Investment Research & Analytics, Business Research & Advisory , Valuation Advisory, Technology Intelligence & IP Research, Procurement & Supply Chain Intelligence practices, helps them ask the right questions, find the right answers, analyze the facts and present unbiased conclusions and insights that help clients. Over 2,000 clients leverage the experience and expertise of Aranca’s 600 people strong team across their 5 multi-disciplinary practice and business functions

Cherian Advisors www.cherianadvisors.com is a valuation firm in India founded on foundation of the spirit of  entrepreneurship, focusing to partner & assist valuation and financial advisory firms globally. We seek to provide sustainable competitive advantage to our clients by delivering high quality services using the “follow the sun approach”.  Our Big 4 experience is our key enabler and differentiator, as we continue to provide cost effective  professional services to our clients in a competitive market.

Veristrat www.veristrat.com is an employee leasing firm that offers flexible and permanent workforce in valuation, advisory and product development. Our high caliber team provides back office support to valuation firms in most collaborative and cost effective way possible.



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