Sebi proposes standard approach for valuation of AIF investments

The capital market regulator has also recommended appointment of independent valuers, specifically for unlisted entities

The Securities and Exchange Board of India (Sebi) has proposed a standard approach for valuing the investment portfolio of Alternate Investment Funds (AIFs) to bring convenience to investors.

In a consultation paper floated on Friday, the capital markets regulator has proposed that AIFs will be mandated to carry out valuation as per International Private Equity and Venture Capital Valuation Guidelines (IPEV guidelines).

These guidelines specify that the techniques can determine value on market approach based on financials or market prices, income approach based on discounted cash flows or replacement cost approach based on net asset valuation techniques.

Presently, the methodology