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Vastukala Consultants (I) Pvt. Ltd.
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Factory & Industrial Valuation

Industrial land, factory buildings, plant and machinery and utilities — valued together as one unit, or asset by asset, by registered valuers for each asset class.

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Overview

Valuing a factory as a whole

A factory combines assets that are valued in different ways: industrial land, often a leasehold plot in an MIDC or other industrial estate; buildings such as sheds, RCC structures and warehouses; and the plant, machinery and utilities that make it work.

Its value also depends on the premise — an operating unit in continued use, assets sold for removal, or a forced sale. Lenders and resolution professionals often need more than one of these values in the same report.

Our IBBI Registered Valuers for Land & Building and for Plant & Machinery work on the same assignment, so the land, buildings and machinery are valued on consistent assumptions and reconciled in one report.

Purposes

When you need a factory valuation

  • Bank finance

    Primary and collateral security for term loans, working capital and refinancing of industrial units.

    Bank finance

    • Land, buildings and machinery in one report
    • Market, realisable and distress values
    • Report in the lending bank's own format
    • Machinery verified against the fixed asset register

  • Insolvency (IBC)

    Fair value and liquidation value of a corporate debtor's factory and machinery.

    Insolvency (IBC)

    • Fair value and liquidation value for each asset class
    • Registered valuers for land & building and for plant & machinery
    • Physical verification at every location
    • Report to the resolution professional or liquidator

  • Recovery & auctions

    Reserve price for DRT and SARFAESI sales of industrial property.

    Recovery & auctions

    • Reserve price for sale of the secured assets
    • Realisable and distress values of the unit
    • Lease terms and transfer charges for estate plots
    • For secured creditors and recovery proceedings

  • Sale or acquisition

    Purchase, sale, slump sale or transfer of an industrial unit or plot.

    Sale or acquisition

    • Value of the unit as a whole or asset by asset
    • Continued-use and removal-basis values
    • Transfer conditions for leasehold industrial-estate plots
    • Asset-wise schedules for the transaction documents

  • Insurance

    Reinstatement value of buildings and machinery for the sum insured.

    Insurance

    • Reinstatement value of buildings and machinery
    • Current cost of replacing each asset as new
    • Utilities and ancillary buildings included
    • Asset-wise schedule for the sum insured

  • Financial reporting

    Fair value and revaluation of industrial fixed assets.

    Financial reporting

    • Fair value for revaluation under Ind AS 16
    • Values matched to the fixed asset register
    • Remaining useful life of buildings and machinery
    • Report for the company's auditors

Scope

What a factory valuation covers

  • Industrial land — freehold and leasehold industrial-estate plots
  • Factory sheds, RCC buildings and warehouses
  • Office, canteen and ancillary buildings
  • Production lines, machinery and equipment
  • Utilities: power, boilers, compressors, water and effluent treatment
  • Internal roads, compound walls and site development
  • Capital work in progress

Checklist

Documents generally required

  • Title deed, or lease deed and allotment letter for industrial-estate plots
  • Approved building plans and completion certificates
  • Fixed asset register and machinery invoices
  • Plant layout and installed capacity
  • Consents to operate and other statutory approvals
  • Insurance policy and previous valuation reports

Methodology

Valuation approaches

  • 01

    Cost approach

    Land value plus the depreciated replacement cost of buildings, plant and machinery — the usual approach for an operating factory.

    Cost approach

    • Land value from comparable industrial plot sales
    • Replacement cost new of buildings and machinery
    • Less physical, functional and economic obsolescence
    • Erection, installation and indirect costs included
  • 02

    Market approach

    Comparable sales of industrial land and of second-hand machinery, adjusted for size, location and condition.

    Market approach

    • Industrial plot sales in the same estate or area
    • Second-hand machinery prices from dealers and auctions
    • Adjusted for size, location, age and condition
    • Lease terms and transfer charges for estate plots
  • 03

    Income approach

    Capitalised rent for leased industrial buildings and warehouses.

    Income approach

    • Rent from comparable industrial buildings and warehouses
    • Lease terms, vacancy and outgoings considered
    • Capitalised at a yield for that type of property
    • Cross-checked against the cost approach

Our process

How an assignment runs

  1. Step 01

    Scope

    We agree the purpose, the basis and premise of value and the assets covered.

  2. Step 02

    Documents

    We review title or lease documents, approvals and the fixed asset register.

  3. Step 03

    Site inspection

    Engineers inspect the land, measure the buildings and verify each machine.

  4. Step 04

    Valuation

    Registered valuers value land & buildings and plant & machinery on consistent assumptions.

  5. Step 05

    Reconciliation

    Values are reconciled into one conclusion for the unit, with asset-wise schedules.

  6. Step 06

    Report

    A signed report in the bank's, IBBI's or the auditor's required format.

Who does the work

Our team for this service

IBBI Registered Valuers for Land & Building and Plant & Machinery who value industrial units.

FAQ

Frequently asked questions

Can't find the answer? Ask us directly — we're happy to explain how an assignment would work.

All questions
How is leasehold industrial land valued?

For the unexpired period of the lease, taking into account the lease terms, transfer charges and any restrictions imposed by the industrial-estate authority.

Can you value the factory and the machinery in one report?

Yes. Land and buildings and plant and machinery are valued by registered valuers for each class and reconciled into one report, with separate schedules.

What is the difference between going-concern and liquidation values?

A going-concern (continued use) value assumes the factory keeps operating with its machinery in place. Liquidation value assumes a quick sale of assets, often piecemeal, and is usually lower.

Case studies

Assignments of this kind

How factory & industrial valuation assignments have run in practice — from our assignment records, anonymised where the client has not agreed to be named.

All case studies

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Contact us

Tell us what needs valuing

Take the first step — tell us about the asset or project and we'll take care of the rest.

  • Head office

    B1-001, U/B Floor, Boomerang, Chandivali Farm Road, Powai, Andheri East, Mumbai 400072, Maharashtra, India

  • Other offices

    Thane · Pune · Nashik · Chhatrapati Sambhajinagar · Nanded · Indore · Ahmedabad · Rajkot · Delhi NCR

  • Call

    +91 22 4749 5919

  • WhatsApp

    +91 98195 97579

  • Email

    mumbai@vastukala.co.in

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