MCA Raises the Bar for Registered Valuer Organisations: ₹25 Lakh Capital Rule and the 2026 Governance Shift

Valuation has become one of the most consequential inputs in restructurings, insolvency proceedings, mergers, preferential allotments, related-party transactions and other corporate actions. In 2026, the Ministry of Corporate Affairs tightened the institutional framework behind that profession by amending the eligibility conditions for Registered Valuer Organisations (RVOs). The headline change is a mandatory minimum paid-up share capital of ₹25 lakh, but the deeper significance is regulatory: the entities that enrol, regulate and discipline registered valuers are now expected to demonstrate greater institutional capacity.

What changed in 2026

The Companies (Registered Valuers and Valuation) Amendment Rules, 2026 were notified by the Ministry of Corporate Affairs vide G.S.R. 432(E) dated 1 June 2026. The amendment substitutes Rule 12(1)(i) of the Companies (Registered Valuers and Valuation) Rules, 2017. The Insolvency and Bankruptcy Board of India’s official legal-framework page also lists the amendment dated 1 June 2026.

The revised Rule 12(1)(i): four core conditions

An organisation seeking recognition as an RVO must be registered under Section 25 of the Companies Act, 1956 or Section 8 of the Companies Act, 2013. It must now have a minimum paid-up share capital of ₹25 lakh. Its sole object must be dealing with matters relating to regulation of valuers of one or more asset classes, and its bye-laws must contain the requirements specified in Annexure III of the 2017 Rules.

The amendment applies to the organisation that regulates valuers, not to an individual registered valuer. That distinction matters: the new ₹25 lakh threshold is an institutional eligibility requirement for an RVO, not a personal net-worth or capital requirement imposed on every valuer.

Transition relief until 31 March 2028

Existing RVOs that did not have the specified minimum paid-up capital when the amendment commenced have been given time until 31 March 2028 to comply. This is important because the relief is transitional in nature. Organisations seeking fresh recognition should structure themselves to satisfy the amended eligibility conditions from the outset rather than assume that the 2028 date is a general deferment for all applicants.

Why the capital threshold matters beyond the number

RVOs are front-line professional-regulatory institutions. They are expected to maintain membership systems, educational and training infrastructure, monitoring processes, grievance mechanisms, disciplinary architecture and governance controls. A prescribed capital floor therefore operates as more than a balance-sheet condition. It can be read as a regulatory signal that bodies supervising high-stakes valuation work should have sufficient organisational substance and resources to perform those functions credibly.

Connection with Section 247 of the Companies Act, 2013

The amendment has been issued under Section 247 read with Sections 458, 459 and 469 of the Companies Act, 2013. Section 247 is the statutory anchor for valuation by registered valuers where valuation is required under the Companies Act. In practice, valuation outcomes often influence shareholder rights, consideration structures, solvency assessments and judicial scrutiny. Strengthening the institutional layer that oversees valuers is therefore relevant to boards, audit teams, insolvency professionals, transaction advisers and litigators—not only to valuation firms.

Practical implications for RVOs

RVO boards should assess their present paid-up capital against the ₹25 lakh floor, document a time-bound capital plan where there is a shortfall, review whether their memorandum preserves the required sole-object condition, and test their bye-laws against Annexure III. Governance teams should also consider whether the capital increase affects member approvals, authorised capital, filings, donor or contributor arrangements, accounting treatment and internal conflict-of-interest policies.

What companies and insolvency professionals should check

Companies appointing registered valuers should not stop at verifying an individual’s registration certificate. Engagement procedures should also capture the valuer’s asset class, validity of registration, RVO affiliation, independence declarations, scope of work, valuation date, standards applied and conflict checks. In insolvency and restructuring assignments, where valuation is routinely challenged by stakeholders, a stronger institutional trail can materially improve defensibility.

Compliance and litigation takeaway

The 2026 amendment should be viewed as part of a broader shift toward stronger valuation governance. For RVOs, the immediate task is eligibility compliance. For companies and professionals relying on valuation reports, the larger task is process quality: selecting the right valuer, preserving a clean appointment record, ensuring independence, recording assumptions and maintaining a defensible valuation file. In contested transactions, process failures can become as important as the headline valuation number itself.

Professional action points

RVOs should complete a Rule 12 gap analysis well before 31 March 2028. Companies should update registered-valuer appointment checklists and board-note templates. Insolvency professionals should align valuer onboarding and documentation with the latest IBBI valuation framework. Audit and legal teams should retain evidence supporting independence, methodology, assumptions and management inputs, especially where the valuation could later be examined by NCLT, NCLAT, a High Court, regulators or shareholders.

Disclaimer

This article is intended for professional information and general discussion only. It is not legal, tax, valuation or investment advice. The applicable law, rules, notifications and facts of a specific transaction should be independently reviewed before acting.