Merchant Banker vs Registered Valuer: Who Signs Which Report?

On 5 December 2025, SEBI quietly rewrote the rulebook on who gets to put their signature on a valuation report, and most founders still don't know it happened. If you've been asking a Merchant Banker to sign something a Registered Valuer should be signing, or vice versa, your report may not hold up the next time SEBI, the Income Tax Department, or an auditor comes asking.

This is the question every CFO and company secretary has been Googling since the notification landed: Merchant Banker vs Registered Valuer, who signs which report? We're going to answer it plainly, with the actual regulation numbers, because a valuation report with the wrong signature is not a valuation report. It's a liability.

Key Takeaways

Merchant Banker vs Registered Valuer: The Line SEBI Just Redrew

Every startup founder in India eventually needs a valuation report. The question of Merchant Banker vs Registered Valuer, who signs which report, used to have a fuzzy answer.

Not anymore. SEBI's amendment to the Merchant Bankers Regulations, notified on 5 December 2025, added Regulation 13A. It says plainly that Merchant Bankers are restricted from undertaking core valuation assignments going forward.

That single clause moved a large chunk of valuation work, work Merchant Bankers had quietly done for years, over to Registered Valuers. No grey areas left. If your CFO is still routing a swap ratio certificate through a Merchant Banker, that workflow is now non-compliant.

What a Registered Valuer Actually Signs

A Registered Valuer is licensed under the Companies (Registered Valuers and Valuation) Rules, registered with an IBBI-recognised Registered Valuers Organisation. This is the person who signs the reports Companies Act 2013 requires.

• ESOP fair value reports under Ind AS 102 for accounting purposes
• Fresh issue of shares under Section 62 of the Companies Act 2013
• Fair value for slump sales, mergers, and demergers
• Valuation of non-frequently traded shares under Regulation 8(2)(e) of the SAST Regulations
• Swap ratio certification in share-exchange open offers under Regulation 9(5)(c), a clause that used to sit with Merchant Bankers

If your company is issuing ESOPs, doing a rights issue, or sitting on the other side of a merger, the signature you need belongs to a Registered Valuer. That's the current answer to Merchant Banker vs Registered Valuer, who signs which report, and it's a wider net than it was a year ago.

What a Merchant Banker Still Signs

Merchant Bankers haven't disappeared from the valuation conversation. They still sign reports tied to capital markets activity that falls outside the new restriction, and they remain relevant for a specific, well-worn use case: Rule 11UA valuations under the Income Tax Act.

When a company issues shares to residents or non-residents and needs to justify the issue price to the tax department, a Merchant Banker's Discounted Cash Flow report is still the standard route. The baseline professional fee for this kind of income tax valuation report starts around ₹65,000, and it typically takes 10 to 12 business days once you've handed over complete financial data.

Did You Know?

A Merchant Banker's DCF report for Rule 11UA compliance requires 5-year financial projections to be considered defensible in a tax audit.

Source: KRPR Associates

Merchant Banker vs Registered Valuer: A Side-by-Side Comparison

Notice the pattern. Regulatory, ownership, and accounting valuations sit with the Registered Valuer. Tax-facing DCF work still sits with the Merchant Banker. That's the practical answer to Merchant Banker vs Registered Valuer, who signs which report, once you strip out the noise.

Why the SEBI Change Matters for Founders and CFOs

Cap tables live in spreadsheets. Valuation reports live in filing cabinets. And somewhere in between, companies keep sending the wrong document to the wrong signatory because nobody updated the checklist after 5 December 2025.

Here's what breaks when you get it wrong. A swap ratio certificate signed by a Merchant Banker after the transition window closes is not a valid document anymore. SEBI granted a 9-month runway for assignments that were already underway, but that window is not indefinite, and it is not a loophole for new mandates.

We built Advisory to remove that guesswork. Every valuation we run, ESOP fair value, Rule 11UA DCF, fair market value for a secondary sale, gets routed to the right signatory under the current regulation, not the one that applied last year.

ESOP Valuations: Where Registered Valuers Now Dominate

If your company is issuing ESOPs this year, the Registered Valuer is your point person, full stop. Ind AS 102 requires a defensible fair value at grant date, and that number feeds directly into your books, your ESOP pool math, and your cap table.

We manage that entire chain on Tabulate. Grant letters, vesting schedules, and the fair value inputs from your Registered Valuer sit in one place, not scattered across three vendors and a shared drive.

ESOP holders don't understand their equity when the numbers behind it live in five disconnected documents. A single source of truth fixes that, and it starts with knowing which report needs which signature.

Secondary Transactions and the Fair Market Value Question

Secondary transactions happen through informal networks more often than they should, and pricing a secondary sale correctly depends on getting the fair market value report right. For non-frequently traded private company shares, that valuation now comes from a Registered Valuer under Regulation 8(2)(e), not a Merchant Banker.

Get this wrong and the transaction documentation, the NDA, the LOI, the SPA, all inherit a pricing basis that won't survive scrutiny. Our Transact platform builds the FMV requirement into the workflow itself, so ROFR coordination and settlement happen on a number that's actually compliant.

The starting fee for a standard valuation report required under Indian equity compliance.

Common Mistakes Companies Make With Merchant Banker and Registered Valuer Reports

We see the same errors on repeat. None of them are complicated to fix once you know the current rule.

• Using a Merchant Banker for ESOP fair value. This has always been a Registered Valuer's job under Ind AS 102, not something that changed in December.
• Assuming the old SAST framework still applies. Regulation 9(5)(c) and Regulation 8(2)(e) now point to Registered Valuers, and continuing to route swap ratio work to a Merchant Banker post-transition is a compliance gap.
• Treating Rule 11UA and Companies Act valuations as interchangeable. They are not. One is a tax document, the other is a corporate law document, and they can require different signatories entirely.
• Skipping the engagement letter. Both a Merchant Banker and a Registered Valuer need a clear scope of work in writing before the assignment starts. No workarounds.

How We Fit In: Advisory, Built for Compliance, Not Around It

For founders and CFOs, the fastest way through this is to stop guessing which professional signs which report and let someone who tracks the regulation do it for you. Our Advisory team handles ESOP scheme design, SEBI-compliant valuations using DCF and CCA methods, and dematerialisation, so the right signatory ends up on the right document every time.

For company secretaries and compliance teams juggling multiple filings a year, this isn't a nice-to-have. It's the difference between a report that survives an audit and one that gets flagged.

Investors and family offices tracking a portfolio company through a valuation event can follow the same numbers inside Folio, so a Registered Valuer's fair value doesn't sit in a PDF nobody opens again.

Conclusion: Merchant Banker vs Registered Valuer, the Answer Is Getting Narrower

Merchant Banker vs Registered Valuer, who signs which report, used to be a question with room for interpretation. After 5 December 2025, it isn't anymore.

Registered Valuers now sign ESOP fair value reports, Section 62 issuances, swap ratios, and non-frequently traded share valuations. Merchant Bankers still hold the Rule 11UA tax valuation lane, and that's about it.

We are building the infrastructure, an ecosystem of platform, products, and services that bring transparency to every stakeholder in India's private market ecosystem. Getting the signature right on a valuation report is a small part of that, but it's the part that keeps your equity clean when someone comes to check.

Frequently Asked Questions

Can a Merchant Banker still sign an ESOP valuation report in 2026?

No. ESOP fair value under Ind AS 102 requires a Registered Valuer, and that hasn't changed under the December 2025 SEBI amendment. Merchant Bankers were never the correct signatory for this specific report.

What changed in the Merchant Banker vs Registered Valuer rule on 5 December 2025?

SEBI added Regulation 13A to the Merchant Bankers Regulations, restricting them from core valuation assignments. Swap ratio certifications and non-frequently traded share valuations moved over to Registered Valuers under Regulations 9(5)(c) and 8(2)(e).

Is there a grace period for valuations that were already in progress before the SEBI notification?

Yes, SEBI granted a 9-month transition period for ongoing assignments to close under the old framework. New assignments started after the notification date must follow the Registered Valuer requirement.

Who signs a Rule 11UA valuation report for tax purposes?

A Merchant Banker still signs the DCF-based Rule 11UA report for income tax compliance, and this typically costs around ₹65,000 with a 10 to 12 business day turnaround. Some providers offer expedited delivery in as little as 3 working days for an added fee.

Do I need a Registered Valuer for a secondary share sale?

If the shares are non-frequently traded, yes, the fair market value must come from a Registered Valuer under Regulation 8(2)(e). This applies whether the transaction runs through informal channels or a structured platform.

Is it worth hiring an advisory firm instead of managing this in-house?

For most founders and CFOs, yes. The Merchant Banker vs Registered Valuer question changes with regulation, and an advisory partner that tracks these updates keeps your valuation reports from becoming a compliance liability later.

Where can I get a compliant valuation report handled end to end?

Our Advisory team manages ESOP valuations, Rule 11UA reports, and dematerialisation under the current SEBI and Companies Act framework, so the signature on your report is never the wrong one.