A valuation from July 2024, a vote in October 2026

A valuation from July 2024. A vote in October 2026.

Written on 21 September 2026, based on public reports at that time.

Next month, shareholders of a large listed company vote on a merger scheme.

The share exchange ratio they are voting on came from a valuation report dated July 2024. An addendum followed in August 2025. The vote is in October 2026.

Twenty-six months between the number and the decision.

Nothing improper has happened. This is simply how schemes of arrangement work in India, and that is exactly why it is worth talking about.

A scheme takes a long road. Board approval, the exchange and SEBI no objection, admission before the NCLT, court convened meetings of shareholders and creditors, then the sanction order. Eighteen months to two and a half years is routine.

But a valuation is not a live feed. It is a photograph taken on one date, using the financials, the order book, the debt and the market conditions of that date.

Two companies do not stay frozen while the paperwork travels. In twenty-six months one may have won a large order, lost a big customer, taken on debt, or simply grown faster than the other. The relative value behind the ratio drifts quietly.

The ratio does not move on its own. Where a scheme itself changes along the way, valuers issue addenda and confirm whether the ratio still holds. But elapsed time alone triggers nothing automatically.

So three practical things.

• If you are voting on a scheme, or on the board approving one, ask two questions. What was the valuation date. And what has changed in the relative performance of the two companies since then.

• If you are a promoter negotiating a scheme, decide at the start what happens if the gap opens. A fixed ratio regardless of drift is a legitimate choice. So is a reopener if performance diverges beyond a threshold. Silence is the only option that is not a choice.

• And if you are the valuer, put the valuation date and the subsequent events cut off where nobody can miss them, and say plainly what the report does not cover.

Every valuation carries a date for a reason. The further a decision travels from that date, the more the number becomes a memory rather than a measurement.