An IP valuation is a number someone else will accept. Who that someone is — a board, a buyer, an auditor, a tribunal — decides both the method and who is permitted to sign it.
This is the part of IP valuation most Indian firms leave out of their marketing: for a large class of purposes the number is worthless unless a registered valuer signs it. Knowing which purpose you are in changes who you need to hire, and it is the first question worth asking.
Four things determine whether a valuation will survive the meeting it was made for.
Where a valuation is required under the Companies Act 2013, section 247 requires it to be done by a person registered as a valuer with the Insolvency and Bankruptcy Board of India through a Registered Valuers Organisation. Registration is granted by asset class, and a valuer may not certify outside the class they hold. Intangibles, goodwill and IP sit in the Securities or Financial Assets class.
Companies Act 2013, s. 247; IBBI registered-valuer framework, asset class 'Securities or Financial Assets' — verified 3 Sep 2026.There are three approaches. Cost asks what it would take to recreate the asset — useful for early-stage or internal-use assets with no revenue history. Market asks what comparable assets changed hands for — rarely usable in India, because comparable IP transactions are seldom public. Income asks what cash the asset will produce, most often through relief-from-royalty: what you would have had to pay to licence the asset if you did not own it.
Cost, market and income approaches; relief-from-royalty as an income-approach variant.Under Ind AS 38 an internally generated brand is not recognised as an asset. Buy the same brand and it appears on the balance sheet at fair value through the purchase price allocation. So the accounts show acquired intangibles and stay silent about the ones you built — which is exactly the IP most Indian mid-market businesses depend on.
Ind AS 38 (Intangible Assets); Ind AS 103 / IFRS 3 business combinations and purchase price allocation.Every income-approach number rests on a forecast, a royalty rate, a useful life and a discount rate. Change any one and the answer moves substantially. A defensible report shows those four openly and says where each came from; a weak one shows only the total.
Practice point, not a legal requirement.Direct answers, written to be quoted. Where the honest answer is “it depends”, we say what it depends on.
The process of putting a defensible monetary figure on a patent, trade mark, design, copyright, software or other intangible — and, just as importantly, recording the assumptions that produce it.
There is no single 'value'. The same trade mark is worth different amounts in a distress sale, a licence negotiation and a purchase price allocation, because each answers a different question.
For valuations required under the Companies Act 2013, section 247 requires a registered valuer — registered with the IBBI through a Registered Valuers Organisation, in the asset class covering the asset. Intangibles and IP fall in Securities or Financial Assets, and a valuer cannot certify outside the class they hold.
Outside that statutory band — a licence negotiation, an internal decision, a board paper, a commercial argument — no registration is legally required, and the analysis is judged on its reasoning rather than the signature.
Ask where the number is going. Into statutory accounts, a scheme of arrangement, a regulatory filing or an insolvency process — you need a registered valuer in the right asset class. Into a negotiation, a pitch, a board decision or a licence discussion — you do not.
Getting this wrong is expensive in one direction only. A commercial analysis used where a statutory report was required has to be redone.
Cost — what it would take to recreate the asset today. Market — what comparable assets have sold for. Income — the present value of the cash the asset is expected to generate.
In India the market approach is often unusable because comparable IP transactions are rarely disclosed. Most defensible Indian IP valuations are income-based, with cost used as a floor or a sanity check.
An income approach that asks: if you did not own this asset, what would you have to pay someone else to use it? You forecast the revenue the asset touches, apply a royalty rate, tax it, and discount it back.
It is the most common method for brands and trade marks because it isolates the asset's contribution without having to separate it from every other part of the business.
The purpose and the intended user; a description of the asset and confirmation of who owns it; the standard applied; the approach chosen and why the others were rejected; the assumptions — forecast, royalty rate, useful life, discount rate — each with a source; the calculation; and the limitations.
If a report does not state its purpose and its intended user on the first page, treat the number with caution. A valuation prepared for one purpose is usually not usable for another.
Yes, and it is the most commonly valued intangible. Usually by relief-from-royalty: the revenue the brand touches, a royalty rate benchmarked to comparable licences, over the period the brand is expected to keep contributing.
The precondition is ownership. If the mark is registered in a founder's name, unregistered in a class you actually trade in, or used under an unrecorded licence, that has to be fixed before a number means anything.
Yes, with the grant risk priced in. A pending application is valued as the granted position discounted for the probability of grant, the likely scope after prosecution, and the time remaining.
For Indian applications the subject-matter exclusions in sections 3(d) and 3(k) are a material part of that risk and should be assessed explicitly rather than folded into a generic haircut.
Because Ind AS 38 does not permit it. Internally generated brands, mastheads, customer lists and similar items cannot be recognised as assets, and research expenditure is expensed as incurred. Development costs are capitalised only where specific criteria are met.
The practical consequence is that the brand a mid-market Indian business has spent thirty years building is worth a great deal and appears in the accounts at nothing. That is not an error — it is the standard working as designed, and it is why a separate valuation is needed when the number matters.
When one company acquires another, the price paid has to be allocated across the identifiable assets acquired, at fair value, with the remainder recorded as goodwill. Identifiable intangibles — brands, technology, customer relationships — are valued and recognised separately as part of that exercise.
This is the moment a business's IP finally appears on a balance sheet, and it is usually the first time anyone has valued it properly. Doing the ownership work before the deal, rather than during it, is the difference between a clean allocation and a repriced one.
It is the period the asset is expected to contribute cash, and it is a judgement supported by evidence — legal term, renewal expectations, technology cycles, and the actual behaviour of the market.
It matters twice: it sets the amortisation charge in the accounts, and it caps the cash-flow period in an income valuation. An optimistic life is the most common way a valuation quietly inflates.
It can be charged, but Indian lenders rarely accept intangibles as primary security. There is no developed market for realising IP collateral, so most lending against IP in India happens indirectly — the IP supports the business case rather than standing as the security itself.
That is a market reality rather than a legal prohibition, and it is the honest answer to give before anyone builds a funding plan around it.
The analysis is rarely the slow part. Establishing clean ownership is. Expect to supply registration certificates, assignment and licence agreements, revenue attributable to the asset, and any prior valuations.
Where ownership gaps surface — an unassigned contractor deliverable, a mark in the wrong name — those are fixed first, because a valuation of an asset you do not cleanly own is not usable.
Nothing gated, nothing stored on our side. Bring the result to the call.
These are not Platinova client matters. They are the public record.
Longer pieces by Nayan Rawal.
This page explains how the law and the market generally work in India. It is general information, not legal advice on your situation, and the position can change. Before acting, take advice on your own facts.