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CS Professional · Corporate Restructuring, Valuation and Insolvency · Valuation of Business and Assets for Corporate Restructuring

Under a demerger of the textile division of Vindhya Ltd into a resulting company, shareholders of Vindhya receive shares in the resulting company. Who is generally required to give the valuation report supporting the share entitlement ratio for the scheme under the Companies Act, 2013 framework and SEBI requirements for listed entities?

The share entitlement ratio is supported by an independent registered valuer's report, and for a listed company a SEBI-registered merchant banker must also give a fairness opinion on that valuation. The ROC or RBI does not prepare it.

  1. AA registered valuer, along with a fairness opinion from a SEBI-registered merchant banker for a listed companyCorrect
  2. BThe company's statutory auditor only, without any other report
  3. CThe Registrar of Companies after inspecting the books
  4. DThe Reserve Bank of India through a mandatory pricing order

Explanation

Valuation in schemes is done by an independent registered valuer, and for listed companies SEBI requires a fairness opinion from a merchant banker on the valuation. The auditor, ROC or RBI do not prepare the entitlement ratio valuation.

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