Sebi May Bring Standard Valuation For AIFs: Report

As per the report, the aim is set out best practices for determining fair value AIF investments, especially in unlisted startups, real estate, infrastructure and the credit space

learn more about Teena Jose

By Teena Jose

Sebi Twitter handle

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

The securities and exchange board of India (Sebi) may prescribe standard valuation norms for alternative investment funds (AIFs) along the lines of international private equity and venture capital valuation (IPEV) guidelines, which are followed by funds globally. The regulator may also prescribe a list of valuers, which may include global consultancy firms and independent valuers, according to a FE report.

As per the report, the aim is to set out best practices for determining fair value AIF investments, especially in unlisted startups, real estate, infrastructure and the credit space. The guidelines are expected to provide a framework that is consistent with global accounting principles and make the INR 6.94 trillion AIF industries more competitive.

Siddarth Pai, partner, 3one4 Capital, in the news report was quoted as saying, "At present, you could have a situation where the same unlisted investment has wildly differing fair market values across different funds depending on who does the valuation and the methodology used. Distortions in valuations could especially be glaring for investments in startup firms. A standard set of valuation norms will help investors better track the progress of their investment during the life of the fund and know its value if the fund were to be liquidated on a particular date."

As per the report, the current valuation requirement creates a number of hurdles for fund managers especially in case of unlisted companies, including startups. In such cases, the fund manager may need to rely on data that is provided by the portfolio companies, which may not be readily available.

Teena Jose

News Desk Reporter with Entrepreneur India

Teena is a post graduate in financial journalism. She has an avid interest in content creation, digital media and fashion.

Related Topics


Invest in Yourself: 10 Things Every Working Woman Should Do This Year

When striving for success, it is easy to forget about your mental and physical health. But without health, you cannot fully succeed. Follow these ten lifestyle strategies for success in your personal and professional life.


3 Expert-Backed Strategies for Blowing People Away With Your First Impression

Nothing is more important than a good first impression. The first five seconds are everything.

News and Trends

Seven Books To Get Your Hands On To Start Investing

'An investment in knowledge pays the best interest' once noted Benjamin Franklin, and it stands true even after two centuries. Here are seven books to help the novice in you get started on investing

Thought Leaders

5 Small Daily Habits Self-Made Millionaires Use to Grow Their Wealth

We've all seen what self-made millionaires look like on TV, but it's a lot more subtle than that. Brian Tracy researched what small daily habits these successful entrepreneurs adopted on their journey from rags to riches.

News and Trends

Micro VCs Find Firm Footing In India's Startup Ecosystem

These investors have nestled themselves between accelerators, incubators, and the larger VC ecosystem, says BlackSoil's Ankur Bansal