It is a document prepared by a Licensed Merchant Banker that provides an assessment of the value of a particular asset or property. It is used in financial transactions, legal proceedings, taxation, or for other purposes where an accurate and independent valuation is required.

In India, a Merchant Banker Report can only be issued by a Valuer who is licensed from the Securities and Exchange Board of India (SEBI) and is authorized to conduct valuations of equity shares of the Company.

In India, valuations are categorized into different sectors such as real estate, plant and machinery, securities or financial assets, and business or intangible assets, among others. Each category requires specialized knowledge and certifications to issue a Valuation Report.

To obtain a Merchant Banker Valuation Report, you need to engage a Merchant Banker who is authorized to undertake Valuations of Equity shares. The valuer will conduct the necessary assessments and prepare the report based on the specific requirements and purpose of the valuation.

The requirement of a Merchant Banker Valuation Report depends on the specific circumstances, legal and regulatory requirements, and the purpose of the valuation. For certain transactions or legal proceedings, obtaining a Merchant Banker Report may be mandatory.

A Merchant Banker Valuation Report should include details about the valuer’s credentials, scope of work, purpose of valuation, methodology used, market analysis, asset description, valuation assumptions, comparable sales data (if applicable), valuation results, and the valuer’s conclusion and opinion of value.

The validity of a Merchant Banker Valuation Report may vary depending on the purpose and nature of the valuation. In some cases, valuations may have a specific expiry date, while in others, the report may be considered valid until there are significant changes in market conditions or other relevant factors.

Yes, a Merchant Banker Valuation Report can be subject to review or challenge, especially if there are legitimate concerns about the methodology used, data inputs, or other relevant factors.

The list of documents required for Valuation are:

• Provisional Financial Statement of the Company as on Valuation Date
• Last two years Audited Financials of the Company
• Next five years’ financial projection 
• MOA & AOA/Constitutional documents of the Company
• Corporate profile of the company
• Shareholding pattern as on Valuation Date
• Date of appointment of Valuer
• Valuation date
• List of Directors as on Valuation date

Discounted Cash Flow Method (DCF) is widely used for valuation of startups. This approach is used for estimating the enterrprise value by calculating the present value of all future cash flows. 

When a company issues equity shares or preference shares or CCD to any investor then the report is required.

Only a Merchant Banker licensed from SEBI can issue a Merchant Banker Valuation Report.

A startup is required to obtain a Merchant Banker Report under the following circumstances:

• While issuing Equity shares, Partly or Optional or Compulsory Convertible Preference Share or Partly Optional or Compulsory Convertible Debentures.
• While issuing shares other than cash.
• While issuing Sweat Equity shares either for cash or for consideration other than cash.