Valuation Standards in AIFs & PMS – Why Numbers Must Speak the Same Language

Portfolio valuation is the backbone of investor confidence. SEBI mandates that every AIF and PMS follow transparent, consistent, and independently reviewed valuation norms so returns aren’t inflated by optimism.

For AIFs
Category I & II funds must appoint a SEBI-registered valuer to determine fair value of unlisted holdings every six months. The methodology — DCF, comparable multiples, or third-party appraisals — must remain consistent across reporting cycles.

For PMS
Listed securities are valued at market prices from recognized exchanges; illiquid or suspended scrips require fair-value policies disclosed in the client agreement.

Why It Matters
A transparent valuation policy keeps manager incentives aligned and ensures NAVs reflect true realizable worth.

Key Takeaway: Valuation discipline converts perception into proof.
 

Disclaimer: Educational only.