Plant & Machinery Valuation in India: Methods, Process & When You Need One
Plant and machinery valuation determines the fair value of industrial equipment using the Cost, Market, or Income approach, depending on the purpose: lending, financial reporting, insurance, transactions, or dispute. Axium performs these valuations as an IBBI Registered Valuer for the Plant & Machinery asset class.
As of 2026, Axium Valuation Services LLP is registered under IBBI/RV-E/04/2021/144 for the Plant & Machinery asset class.
Why this valuation is essential
Plant, machinery and equipment are crucial business assets. Their valuation often pairs with real estate and infrastructure valuation in combined assignments, and supports distressed asset and NPA valuation and the fixed-asset leg of M&A. It plays a vital role in:
- Financial reporting & compliance (Ind AS 113, IFRS 13, AS 10, AS 28)
- Secured lending & collateral assessment for banks & NBFCs
- Mergers, acquisitions & business restructuring
- Taxation & depreciation accounting (Income Tax, GST, Customs)
- Asset impairment & fair value measurement
- Litigation, insurance & dispute resolution
The plant & machinery valuation process
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Asset identification
Comprehensive inventory logging, including make, model, capacity and serial number.
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Physical inspection
On-site assessment by a certified engineer to check operational health, wear and maintenance history.
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Data analysis
Factoring in effective age, functional obsolescence and current replacement cost.
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Valuation report
An audit-ready document detailing methodology and the final assessed value.
Cost, Market & Income approach compared
| Approach | How it works | When it's used |
|---|---|---|
| Cost approach | Replacement cost of an equivalent new asset today, less depreciation. | Specialised machinery with no active resale market. |
| Market approach | Value based on recent sales of comparable machinery in the secondary market. | Standardised, widely traded equipment. |
| Income approach | Value based on future revenue the asset is projected to generate. | Revenue-generating or leased equipment. |
Equipment categories we value
- Industrial & manufacturing equipment
- Plant & machinery
- Construction & earthmoving equipment
- Medical & healthcare equipment
- Agricultural machinery
- IT & office equipment
- Marine, aviation & transportation equipment
Regulatory framework we follow
Axium Valuation Services LLP adheres to national and international valuation standards, including:
Ind AS 113 & IFRS 13
Fair value measurement.
Income Tax Act, 1961
Section 32 (depreciation), Section 50C (capital gains).
Companies Act, 2013
Registered Valuers under IBBI.
RBI & SEBI guidelines
Compliance for financial institutions & listed companies.
Fair value under Ind AS 113
Plant and machinery valued for financial reporting under Ind AS 113 (equivalent to IFRS 13) uses the same Cost, Market and Income approaches described above, applied to determine the price a machine would fetch in an orderly transaction between market participants at the measurement date. For the tangible-asset component of a Purchase Price Allocation under Ind AS 103, Axium provides the plant and machinery fair value input, not the goodwill or intangible-asset figure. Ind AS 36 requires a fresh valuation whenever there are indicators a machine's carrying value may exceed its recoverable amount, from a decline in market value, physical damage, or changed usage plans.
Who needs this valuation
Banks & NBFCs
Secured lending, asset-backed financing and NPA assessments, including loan-to-value assessments and ongoing collateral monitoring under RBI and SARFAESI Act guidelines.
Manufacturing & industrial companies
Asset valuation, depreciation & accounting.
Investors & private equity firms
Procurement, auditing & compliance.
Government & public sector units
Statutory and compliance valuations.
Legal & tax professionals
Litigation, dispute resolution & tax planning.
Insurance companies
Risk assessment, underwriting & claims settlement.
Related services
Frequently asked questions
What are the main methods used to value plant and machinery?
The Cost approach (replacement cost less depreciation), the Market approach (comparable sales), and the Income approach (earning capacity), chosen by asset type and valuation purpose.
Who is qualified to value plant and machinery in India?
An IBBI Registered Valuer for the Plant & Machinery asset class, often working alongside a Chartered Engineer for technical condition assessment.
How long does a plant and machinery valuation take?
Timelines vary with the scale and complexity of the assets and the purpose; a straightforward assignment moves faster than one requiring detailed technical assessment across multiple locations.
Does plant and machinery valuation include physical inspection?
A defensible valuation should always be backed by actual site inspection, not just desk-based data, particularly for specialised or industrial assets.
What is the difference between plant and machinery valuation and real estate valuation?
Plant and machinery valuation covers movable industrial assets and equipment; real estate valuation covers land, buildings and infrastructure. Many assignments require both under one engagement.
What is fair value measurement under Ind AS 113?
Ind AS 113 (equivalent to IFRS 13) defines fair value as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date, and sets out a three-level hierarchy for the inputs used to measure it. Axium Valuation Services LLP, IBBI Registered Valuer entity (IBBI/RV-E/04/2021/144), provides Ind AS 113 fair value measurement for land, buildings, plant and machinery.
What triggers an asset impairment test under Ind AS 36?
Ind AS 36 requires an impairment test when there are indicators that an asset's carrying value may exceed its recoverable amount, such as a decline in market value, physical damage, or changed usage plans. An independent valuation determines the recoverable amount for the impairment calculation. See our full guide to Ind AS 36 impairment testing.
What does a bank need from a secured lending valuation report?
Banks and NBFCs need an independent, IBBI Registered valuation of the collateral, typically real estate, land or plant and machinery, to determine loan eligibility, set the loan-to-value ratio, and support ongoing collateral monitoring. Axium Valuation Services LLP, IBBI Registered Valuer entity (IBBI/RV-E/04/2021/144), prepares these reports for banks, NBFCs and borrowers.
Partner with Axium for expert valuation services
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