Valuation for FEMA / FDI Compliance
Defensible, RBI-pricing-compliant valuation reports for every share issue and transfer between residents and non-residents built to clear AD-bank and RBI scrutiny on the first submission.
What is a FEMA / FDI valuation?
A FEMA / FDI valuation is an independent assessment of the fair value of an Indian company's equity instruments, prepared whenever shares or convertible instruments are issued to, or transferred between, a resident and a non-resident. It exists to satisfy the pricing guidelines under the Foreign Exchange Management Act, 1999 (FEMA) and the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019.
The price at which foreign investment enters or leaves an Indian company cannot be set freely. It must be anchored to a fair value certified by an authorised professional. Without that certificate, the transaction cannot be reported correctly to the Reserve Bank of India (RBI), and the whole investment is exposed to challenge making valuation for FEMA / FDI compliance a gating step, not a formality.
When do you need a
FEMA / FDI valuation report?
You need a FEMA valuation report whenever foreign investment changes hands at issue, at transfer, or at conversion of instruments involving a non-resident. The common triggers are:
The common triggers are:
- Inbound FDI (fresh issue): an Indian company issuing equity shares or compulsorily convertible instruments to a non-resident investor.
- Transfer from resident to non-resident: a resident selling shares to a foreign buyer (reported in Form FC-TRS).
- Transfer from non-resident to resident: a foreign holder exiting to an Indian buyer.
- Swap of capital instruments: exchanging Indian shares for shares in a foreign company.
- Overseas Direct Investment (ODI): an Indian entity investing in a foreign joint venture or subsidiary.
- Conversion of convertible instruments: where the conversion price references fair value at issuance.
Each must be supported, internally consistent, and traceable that documentation is exactly what an auditor reviews.
How FEMA / FDI pricing and valuation works ?
FEMA pricing works on a fair-value floor for money coming in and a fair-value ceiling for money going out. Foreign investment must never enter an Indian company below fair value, and a resident must never pay a non-resident above it.
For unlisted companies, fair value is determined using any internationally accepted pricing methodology on an arm's-length basis most often the Discounted Cash Flow (DCF) method, supported where relevant by Net Asset Value (NAV) and market-multiple approaches. Listed companies follow SEBI pricing guidelines instead.
Two practical rules govern timing and authority:
1. VALIDITY
A FEMA valuation certificate must not be more than
90 days old on the date of allotment or transfer.
If the deal slips past that window,
a fresh valuation is required.
2.CERTIFIER
For an unlisted company, the report must be certified by a Chartered Accountant, a SEBI-registered Category I Merchant Banker, or a practising Cost Accountant under Rule 21 of the NDI Rules. An IBBI registration on its own does not satisfy this requirement.
| Methodology | Value (₹) |
|---|---|
| DCF Method | XX.XX |
| NAV Method | XX.XX |
| Market Multiple | XX.XX |
| Fair Value / Share | XX.XX |
Download specimen FEMA / FDI valuation report
Want to see the format before you engage? Download an illustrative specimen FEMA / FDI valuation report and see exactly how we present methodology, key assumptions, sensitivity analysis, and the fair-value conclusion that AD banks expect.
What we deliver in our FEMA/FDI Valuation Report ?
Every engagement produces a report your Authorised Dealer (AD) bank and the RBI can rely on:
- A FEMA-compliant valuation report with a documented methodology and the rationale for choosing it.
- Key assumptions growth rates, discount rate (WACC), and comparable inputs set out transparently.
- A clear fair-value-per-share conclusion in ₹, with the applicable pricing floor or ceiling stated.
- A certificate formatted for your FC-GPR (issue) or FC-TRS (transfer) filing on the RBI FIRMS portal, with the certifier's registration details.
Why choose Equirium Analytics ?
Equirium Analytics, led by Harsh Patel (NACVA Certified Valuation Analyst), delivers FEMA / FDI valuation reports certified by a Chartered Accountant on our team who is also an IBBI-registered valuer meeting the Rule 21 certifier requirement for unlisted-company pricing. Four things define the work:
Independence.
Unbiased fair-value opinions that hold up to RBI and AD-bank review.
Technical depth.
DCF, NAV, and market-multiple methods applied to internationally accepted, defensible standards.
Confidentiality first.
NDA-first engagement; your financials and deal terms stay protected.
Timeline-driven
Reports delivered to fit your filing window, with the 90-day validity clock in mind.
Our Process in Delivering FEMA/FDI Valuation Report
Consultation
We map the transaction, the route (automatic vs approval), and the applicable pricing rule.
Information
We gather financials, projections, the cap table, and transaction terms.
Analysis
We build the valuation using the appropriate internationally accepted methodology.
Draft review
We walk you through the assumptions and the draft conclusion.
Final deliverables
Your CA-certified report, formatted for FC-GPR / FC-TRS filing.
Ongoing support
Guidance through reporting on the RBI FIRMS portal.
Insights & valuation tools
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Frequently Asked Questions
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