The Journey of Valuation Profession in India: 52nd Valuers Day

Authored by

Mr Vinay K. Goel
Hony. General Secretary, Institution of Valuers (IOV)
MD & CEO, IOV – Registered Valuers Foundation (IOV – RVF)

Valuation as a profession has started attaining its well-deserved status by getting into the league of other leading professions. It is due to the nature of this profession, which prompts the acquisition of comprehensive knowledge including all other professional attributes varying from technical, financial, legal and sociological studies. Due to this aspect, the profession is in much more fluid state than any other profession, thereby requiring a continuous and steady updation of knowledge in all concerned fields.

On the occasion of 52nd Valuers Day, which is the day when Institution of Valuers (IOV) was formed, that is 2nd Oct 1968, we can say with pride that IOV has always been the front runner and perhaps the only one to emancipate the studies, research and knowledge to the fraternity in the field of Valuation only.

IOV has acquired an unparalleled status having almost 80 to 90% of practicing valuers as its members and the process is still on. IOV has attained such a status where all professionals find space and chance to further their professional proficiency in their respective fields, to mitigate the requirements of professional services from different govt. agencies/ authorities and promote policy framework. This becomes apparent when the concerned authorities approach the Institution for providing requisite solutions to their requirements for varied reasons and varied situations.

Journey of valuation as profession began with Government acts such as Rent Control and later for the purposes of Income Tax. Beginning of registration as valuer under sec-34B of wealth tax act, saw a major shift in the profession towards it being institutionalized. Consequently, the profession started finding its place in the financial sector where it achieved a pivotal role for the debtors and creditors, both.

It was obvious that to assess the assets like land, building, plant & machinery etc. the requirement of technocrats to enter into this field happened. But a major question of valuation being a regularized profession with the dedicated professional qualification like other professionals such as CA, CS and CMA, Lawyers, Architects etc. was obvious and level playing is required.

On the other hand, risings numbers of NPA and dwindling economy made the government think about creating robust and meaningful mechanism to counter the problem. Thus, Insolvency and Bankruptcy Act of 2016 came into force changing the entire process of resolution and with that stress on quality and authentic valuation of assets to take place. This thinking led the govt. to enact an act under the company rules whereby it empowered Insolvency & Bankruptcy Board of India (IBBI) to be a regulator of Valuation Profession with in a frame work of rules as prescribed for an individual to become Registered Valuer.

Keeping an eye on future and in order not to lose any such opportunity for its fraternity, where professional, as such attains new levels of skill and status, IOV on its part formed a section – 8 company, in the name of IOV-Registered Valuers Foundation (IOV-RVF) for meeting aspirations of stake holders of valuation profession and the society at large.

Highlighting about this year theme of “Technological Assistance to Valuation”, we are aware that in today’s world it is in the interest of the profession to stress on the use of technology in valuation with repository of authentic information and data for the benefit of not only valuers but also for the users and the concerned authorities. However, a cautious approach is required before adoption of technology lest, it may subordinate the human intelligence.

Valuation is a logical, defendable process of arriving at the opinion as to the worth of a business given the information available, assumption & limiting conditions as on the valuation date, which requires a human “reflective thought”, i.e., Valuers need proper time and space to analyze such vast information and make a professional judgement. With the regulation in place under Companies Act, 2013 read with Companies Rules, 2017, valuers have continued to grow in professionalism and skill and the valuation process continue to become more rigorous. It is clear that valuers need to be very alert before taking into account any new expectations and requirements of clients without ensuring its applicability.

With the changing contours in business models and financial fabric, valuation as a profession is assuming its role as an essential apparatus. With the growing aspirations of stakeholders, requires a professional to take ‘Responsibility’ while being ‘Responsive’ with ‘Reliability’.

Apart from the business needs of valuation, there are also other new avenues for the Valuers such as Disinvestment. The Indian Government is pushing towards asset monetization by privatizing PSUs to fulfil its commitment of “Monetization and Modernization”. This leads to a rapid erosion of value of the public assets making it critical to disinvest early to realize a high value. For this process, Government is regularly requiring valuation services of a reputed Asset Valuer for assisting in the process of Strategic Disinvestment. Such asset valuers are required to have professional affiliation with Institution of Valuers along with other regulatory bodies.

It is evident that with better access to information over the next 5-10 years, valuer’s role can lean towards the higher value with more complex properties and make presence felt globally. So, the capabilities of the Valuer become compatible to the needs of the market and must create sustainability in the Profession.

Towards, the promotion of ‘Valuation Discernment’ in the overall hierarchy of Indian economy, Let’s come together and pledge to celebrate 2nd October as “Valuers Day” and enable the entire fraternity to attain the pedestal of a unique profession in offing.