IBBI CIRP Amendment Regulations 2026: How India Redefined Fair Value in Insolvency Proceedings

On 25 February 2026, the Insolvency and Bankruptcy Board of India (IBBI) notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2026. These amendments target one of the most contentious aspects of the Corporate Insolvency Resolution Process (CIRP): the valuation of the corporate debtor's assets. By redefining fair value, mandating dual sets of registered valuers, introducing a coordinating valuer mechanism, and prescribing structured methodologies for determining both fair and liquidation values, the amendment addresses longstanding concerns about undervaluation, inconsistent valuations, and the lack of accountability among insolvency professionals. For resolution applicants, members of the committee of creditors, and legal practitioners advising on IBC matters, these changes carry immediate practical implications.

The New Definition of Fair Value

The amended regulations revise the definition of fair value to clarify that it represents the estimated realisable value of the corporate debtor and its assets, including both tangible and intangible assets along with underlying synergies, as on the insolvency commencement date. This is a significant departure from earlier practice where fair value estimates were often limited to book values or discounted cash flow projections that did not adequately capture the going-concern value of the business. By expressly including intangible assets and synergies, the amendment recognises that in many modern businesses, particularly in technology, pharmaceuticals, and services sectors, the bulk of the enterprise value lies in intellectual property, brand equity, customer relationships, and operational synergies rather than in physical assets. The revised definition gives valuers a clear mandate to look beyond the balance sheet and capture the full economic potential of the corporate debtor as a going concern.

Dual Valuer Sets and the Coordinating Valuer

The amendment mandates the appointment of two independent sets of registered valuers within specified timelines during the CIRP. Each set must include a coordinating valuer who is responsible for ensuring consistency and coherence across the valuation exercise. The coordinating valuer within each set oversees the methodology, reviews the assumptions used by other valuers in the set, and signs off on the final valuation report. This dual-set mechanism serves two purposes. First, it provides a cross-check: having two independent valuations reduces the risk of a single biased or incompetent valuation driving the entire resolution process. Second, it provides transparency to the committee of creditors, which can compare the two sets of valuations and make more informed decisions about the adequacy of resolution plans. The amendment also prescribes a structured methodology for determining both fair value and liquidation value, reducing the scope for arbitrary or inconsistent approaches.

The 25 Percent Divergence Threshold

A notable new safeguard is the provision for appointing a third set of valuers where the estimates from the first two sets differ significantly. The threshold for triggering this third valuation is a divergence of 25 percent or more between the two sets. If the fair value or liquidation value determined by one set exceeds the other by 25 percent or more, the resolution professional must appoint a third set of registered valuers to conduct an independent valuation. This mechanism is designed to resolve situations where legitimate differences in methodology or assumptions lead to widely divergent outcomes. In practice, significant valuation gaps have been a recurring issue in CIRP proceedings, sometimes resulting in litigation before the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) over whether the committee of creditors had adequate information to evaluate resolution plans. The 25 percent threshold provides a clear, objective trigger for additional scrutiny, reducing the scope for disputes and improving the reliability of the valuation process.

Liquidation Process Amendment: Digital Compliance

Alongside the CIRP amendments, IBBI also amended the Liquidation Process Regulations, 2016, to streamline compliance and reporting during liquidation proceedings. By substituting Regulation 47B(1), the amendment now mandates that liquidators must file all prescribed forms, along with their enclosures, on the Board's electronic platform in accordance with timelines specified for each form, as notified from time to time. This shift to mandatory electronic filing is intended to improve the timeliness and accuracy of liquidation reporting, reduce the administrative burden of physical filings, and create a centralised digital repository of liquidation data that IBBI can use for monitoring and enforcement. Liquidators who fail to comply with the electronic filing requirements within prescribed timelines may face disciplinary action, reinforcing IBBI's broader push towards professional accountability in insolvency proceedings.

Practical Takeaways

The IBBI CIRP Amendment Regulations 2026 strengthen the valuation infrastructure that underpins every resolution process under the Insolvency and Bankruptcy Code. Resolution professionals should update their engagement terms with registered valuers to reflect the new dual-set requirement and the coordinating valuer mandate. Valuers should familiarise themselves with the revised definition of fair value and ensure that their methodologies capture intangible assets and synergies as required. Members of the committee of creditors should expect to receive two independent valuation reports and should use the comparison to assess the robustness of the fair value and liquidation value estimates. Resolution applicants preparing bids should note that more rigorous valuations may narrow the gap between the estimated value and the minimum acceptable consideration, affecting bidding strategy. Legal advisors should monitor whether NCLT and NCLAT apply the new definition of fair value retrospectively to ongoing CIRP proceedings or only prospectively. The shift to electronic filing in liquidation proceedings requires liquidators to register on the IBBI platform and build the workflow for digital submissions within the prescribed timelines. Overall, these amendments reflect IBBI's continuing effort to professionalise the insolvency ecosystem and improve outcomes for all stakeholders.