Private Placement Valuation Checklist: What Companies Must Prepare
TL;DR: A private placement valuation checklist helps companies organise the corporate, financial, and operational documents required before engaging a registered valuer. Having these items ready upfront reduces turnaround time, avoids compliance gaps, and ensures the valuation report accurately reflects the company's fair value under the Companies Act, 2013.
When a company issues shares through private placement under Section 42 of the Companies Act, 2013, a valuation report from an IBBI-registered valuer is a regulatory requirement — not an optional step. Yet many companies begin this process without knowing what needs to be prepared beforehand. Missing documents, outdated financials, and incomplete share records are the most common reasons for delays. This private placement valuation checklist gives founders, CFOs, and company secretaries a clear, actionable reference so the valuation process moves smoothly from day one.
What Is a Private Placement Valuation ?
A private placement valuation determines the fair price of shares issued to a select group of investors under a private placement, as required by the Companies Act, 2013. Unlike a public offering, a private placement involves issuing securities to an identified set of persons, and the pricing must be supported by a valuation report from an IBBI-registered valuer. The report establishes that the issue price reflects the company's fair value and meets regulatory requirements.
Companies typically need Private Placement valuation when raising capital through preferential allotment or fresh equity infusions from strategic or financial investors.
Why Do You Need a Checklist Before the Valuation ?
Preparation directly impacts the speed, accuracy, and compliance of a private placement valuation. When companies provide complete information upfront, the valuer can apply the right methodology, build reliable assumptions, and deliver a defensible report on time.
Without that preparation, the process stalls — missing board resolutions, outdated financials, an unreconciled cap table, or unclear shareholder agreements all require follow-up that extends the timeline and increases risk. A structured checklist eliminates guesswork and ensures nothing critical is overlooked.
The Private Placement Valuation Checklist
This checklist covers the key documents and information a company should have ready before the valuation engagement begins. It is organised into four categories for easy reference.
Corporate and Legal Documents
These documents establish the company's legal identity, ownership structure, and governance framework — all of which feed directly into the valuation.
- Certificate of Incorporation and MOA/AOA: Confirms legal standing, authorised share capital, and any restrictions on share transfers.
- Board Resolution authorising the private placement: The resolution approving share issuance under Section 42 — number of shares, proposed price range, and class of investors.
- Shareholder agreements and side letters: Anti-dilution clauses, liquidation preferences, drag/tag-along rights, and any terms that affect share value.
- Updated capitalisation table (cap table): All outstanding shares, ESOPs, convertible instruments, and ownership percentages — fully diluted.
- Details of past allotments and share transfers: Previous fundraising rounds, transfer prices, and any prior valuation reports.
Financial Documents
Accurate, current financial data is the backbone of any valuation exercise. The valuer uses these to build projections, assess profitability, and determine the appropriate valuation methodology.
- Audited financial statements (last 3 years): Balance sheet, profit and loss, and cash flow statement — audited and signed.
- Provisional or management-prepared financials: If the valuation date falls mid-year, unaudited financials for the stub period are necessary.
- Income tax returns (last 3 years): Cross-referenced with audited financials for consistency.
- Debt schedule: All outstanding borrowings — term loans, working capital, debentures, inter-corporate deposits — with terms, maturity, and interest rates.
- Financial projections or business plan: Revenue forecasts, expense assumptions, and growth drivers for 3–5 years. Critical for income-based methods like discounted cash flow (DCF).
Operational and Business Information
Beyond the numbers, a valuer needs to understand the business — its market, operations, competitive position, and management quality.
- Business overview and company profile: Products/services, revenue streams, target markets, and business model.
- Industry and market context: Sector trends, competitive landscape, and addressable market size.
- Key contracts, order book, and customer concentration: Material contracts, top customer/supplier dependencies, and revenue visibility.
- Management team details: Background and roles of key personnel — relevant for assessing execution capability.
- Intellectual property and intangible assets: Patents, trademarks, proprietary technology, or any intangibles that contribute to value.
Compliance and Regulatory Filings
These items ensure the valuation engagement and the resulting report are aligned with the applicable regulatory framework.
- Private Placement Offer Letter (Form PAS-4): The prescribed form for making the offer, including terms of the issue.
- Previous valuation reports: Any prior IBBI valuation reports or third-party appraisals — useful for understanding valuation history.
- SEBI or RBI approvals (if applicable): Required if the transaction involves listed securities, foreign investors, or cross-border elements.
- Special resolution and shareholder consent: Evidence that the requisite shareholder approval has been obtained or is underway.
Common Mistakes Companies Make
Even well-run companies trip up during the valuation process. Here are the most frequent pitfalls to avoid.
- Using outdated financials. Financial statements more than two quarters old weaken the defensibility of the report. Always provide the most recent available financials — audited or provisional.
- Incomplete or inaccurate cap table. A cap table that misses recent ESOP grants, convertible notes, or secondary transfers leads to incorrect dilution calculations. Reconcile before engaging the valuer.
- Not engaging an IBBI-registered valuer. For regulatory valuations under the Companies Act, 2013, the report must come from a valuer registered with IBBI. A report from an unregistered professional may not be accepted.
- Waiting until the last minute. Starting days before the allotment deadline creates pressure and increases risk. Begin at least 3–4 weeks in advance.
How Equirium Analytics Helps
At Equirium Analytics, we make the valuation process structured and predictable. Our team of IBBI-registered valuers delivers private placement valuation reports that are compliant, defensible, and aligned with your transaction timeline.
From the first conversation, we share a tailored document checklist — so you know exactly what to prepare. Our structured onboarding means fewer back-and-forth cycles, faster turnaround, and a report that holds up to scrutiny from investors, auditors, and regulators.
