IBBI Revises Valuation Framework for MSMEs under Liquidation Process Regulations

The Insolvency and Bankruptcy Board of India (“IBBI”) has notified amendments to the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, introducing a revised valuation framework specifically applicable to corporate debtors classified as Micro, Small and Medium Enterprises (“MSMEs”).

The amendments modify Regulation 35 to provide that, in liquidation proceedings involving MSME corporate debtors, the liquidator shall ordinarily appoint one registered valuer for each asset class instead of two valuers. However, the liquidator may appoint two valuers after consultation with the consultation committee and for recorded reasons.

The revised framework reflects an attempt to balance valuation reliability with procedural efficiency and cost rationalisation in liquidation proceedings involving MSMEs.