Is the 50-hours mandatory education course enough to pass the IBBI exam?

In the 50-hours educational course, time is allocated to topics in proportion to their weightage in the syllabus. The drawback of this is certain topics like macroeconomics (3% weightage) is covered in 1 or 2 hours only.

Is the 50-hours mandatory education course enough to pass the IBBI exam?

The first step one takes towards becoming a registered valuer is to become a member of a Registered Valuers Organization (RVO). A complete list of RVOs can be found here -

Once a person has registered with an RVO, the latter administers a 50-hour educational program meant to teach the syllabus prescribed by the Insolvency and Bankruptcy Board of India (IBBI) for its valuation examination. With the advent of Covid-19, the classes are now being held online (usually through Zoom or MS Teams) and this offers added convenience to candidates.

Depending on batch registrants, usually one will find many candidates who are Chartered Accountants (CA), Cost Accountants (CWA) or Company Secretaries (CS). The awareness of the registered valuer program is high amongst these professionals.

The Chartered Accountant’s parent body, the Institute of Chartered Accountants of India (ICAI), has been conducting a Certification in Valuation course for several years now. This course has close proximity in terms of contents with the syllabus of the IBBI’s valuation course for asset class securities or financial assets (SFA). This course was however restricted to Chartered Accountants and solely meant for continuing education. This could be one reason why awareness about the valuation course among Chartered Accountants is higher.

Typically, across RVOs, the registrants for the IBBI valuer exam (securities or financial assets asset class) are predominantly from these three professional institutions. The popularity of the program is yet to catch up with other streams like Master of Administration (MBA) or postgraduates of universities even though they are also eligible to become registered valuers (with other conditions).

What is the format of the examination?

The Valuation Examination for Securities or Financial Assets category consists of 90 questions, out of which 80 questions will be of 1 mark each and 10 questions of 2 marks each. The questions are of multiple-choice format. You need to select the correct answer and the correct answer earns the marks assigned to the question. A wrong answer attracts a negative mark of 25% of the marks assigned to the question. You need to score 60% to pass the examination.

What is the objective of the 50-hours education course?

The 50 hours is a limited time duration given the vastness of the syllabus. One can expect the RVOs to largely focus on solving quality questions during this time. Participants such as Chartered Accountants (CA), Chartered Secretaries (CS), Cost Accountants (CWA) are normally updated on topics such as general laws, accounting standards and financial statement analysis. These professionals will influence the pace of discussions in the classroom. Naturally, faculties expect participants to quickly solve multiple-choice questions (MCQ) on these topics.

However, the core valuation topics such as the discounted cash flow (DCF) method, multiples approach, comparable transaction method, methods in startup valuation, methods in distress valuation, precedent transactions, greenfield method and other valuation related topics could appear novel to many participants. Generally, Chartered Accountants may be familiar with core valuation topics since they may have exposure to these areas in their practice.

Generally, candidates possessing Master in Business Administration (MBA) or Post Graduate Diploma in Business Management (PGDBM) or Post Graduate in Finance qualifications are generally good at core valuation topics such as fixed income securities, derivatives and equity valuation.

One area that most participants may find difficulties is fixed income securities (bond valuation) and derivative valuation. CA or CS or CWAs who passed the respective exams before 2005 - when capital markets topics were absent in the syllabus - might face difficulty in these areas. Bond valuation appears in the syllabus under the topic Valuation Applications with a total weightage of 35% (including equity and derivatives). Please refer

The mix of topics in the IBBI valuation syllabus ensures that no one professional has an undue advantage in terms of exam performance. It is advisable for candidates (CA, CS, CWA) to study bond valuation and derivative valuation independently either prior to the program or concurrently from online resources or by purchasing a book on valuation.

In summary, RVOs offer good preparatory resources for test-taking and concept clarification in some areas. Since registrants are mostly professionals, classroom discussion will usually be enlightening as participants bring their experience and knowledge to the floor. Certain areas of valuation that are of recent origin especially those relating to capital markets, investment theory, macroeconomics etc. require dedicated study which depends on the individual candidate’s perseverance. Depending on qualification one must assess existing knowledge of topics and work on areas where improvement is required.

In the 50-hours educational course, time is allocated to topics in proportion to their weightage in the syllabus. The drawback of this is certain topics like macroeconomics (3% weightage) is covered in 1 or 2 hours only. This may not be sufficient given that macroeconomics contains 4 subtopics and may require more than 2 hours of study. During this limited time in the course, mainly multiple-choice questions are discussed, without much theoretical teaching.

Similarly, case study (20% weightage) problem sets are solved in the classroom. If you are thorough with topics in valuation applications and approaches, you could directly proceed with handling case studies. Else, this area would be challenging. In the classroom, case studies are generally not broken down (by tracing it back to core valuation techniques) and discussed/debated. Given the paucity of time, the focus is on solving more questions and familiarizing candidates with exam-style questions. And, the focus is on getting to the right answer and recognizing patterns in question papers.

These are some limitations (and of course benefits) of the 50-hour educational course. Above all, you must take into account your qualification background, your strengths and weaknesses vis-a-vis the IBBI syllabus, the quality of teaching in the classroom and your overall learning before appearing for the exam.