The Securities and Exchange Board of India (SEBI) issued a circular on June 21, 2023, standardizing the valuation approach for Alternative Investment Funds (AIFs). Following AIPAC recommendations, IVCA endorsed the International Private Equity and Venture Capital Valuation (IPEV) Guidelines to ensure alignment with global best practices.
On June 21, 2023, the Securities and Exchange Board of India (SEBI) issued a circular standardizing the valuation approach for Alternate Investment Funds (AIFs). The circular mandates that valuations must follow guidelines endorsed by an AIF industry association representing at least 33% of SEBI-registered AIFs. These guidelines were to be selected based on recommendations from the Alternative Investment Policy Advisory Committee (AIPAC), ensuring alignment with global best practices.
The Indian Private Equity and Venture Capital Association (IVCA), recognized as the largest representative body for AIFs in India, was tasked with endorsing appropriate valuation guidelines. Acting on AIPAC's recommendation, IVCA officially endorsed the International Private Equity and Venture Capital Valuation (IPEV) Guidelines. This endorsement reflects IVCA's commitment to promoting transparency, consistency, and alignment with global standards in AIF valuation practices in India.
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As part of this initiative, IVCA was formally acknowledged by IPEV as the Country Partner for India. This recognition positioned IVCA as the primary entity responsible for adapting and facilitating the implementation of these internationally accepted valuation standards within the Indian AIF ecosystem.
Following its endorsement of the IPEV Guidelines, IVCA engaged extensively with relevant stakeholders—including fund managers, valuers, regulators, and industry experts—to create a tailored guidance note. This document adapted the IPEV principles to address unique challenges faced by Indian private equity and venture capital firms, including diverse investment stages, complex capital structures, and evolving market dynamics.
The resulting IVCA Guidance Note on Valuation serves as a critical resource for ensuring consistent valuation practices that align with both international standards and local market realities.
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