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Stressed Assets

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Stressed Assets

The Insolvency and Bankruptcy Code (IBC) is one of the landmark reforms in India. It has aggregated many laws and regulations on bankruptcy in India and has helped in significant improvement in India’s position in the World Bank’s Ease of Doing Business Index. More importantly, the enactment of this law has brought about reformative transformation in the credit behaviour of borrowers by underscoring that honouring commitments to pay is the most crucial part of conducting business.


Strengthening of the new insolvency regime is an on-going process, which can be facilitated through consultation and discussions. Against this backdrop, FICCI has constituted a dedicated Committee on Stressed Assets.

The Insolvency and Bankruptcy Code (IBC) is one of the landmark reforms in India. It has aggregated many laws and regulations on bankruptcy in India and has helped in significant improvement in India’s position in the World Bank’s Ease of Doing Business Index. More importantly, the enactment of this law has brought about reformative transformation in the credit behaviour of borrowers by underscoring that honouring commitments to pay is the most crucial part of conducting business.

The magnitude of usage of IBC clearly shows that it has become the preferred route to resolution for the creditors. The implementation process under the IBC has had a strong and efficient start with the Ministry of Corporate Affairs and the Insolvency and Bankruptcy Board of India (IBBI) having swiftly responded to the needs of new ecosystem. All fora ranging from the NCLT to the Hon'ble Supreme Court of India have upheld the objectives of IBC : resolution, maximisation of value of assets for all creditors and promoting entrepreneurship, availability of credit and balancing the interests.


FICCI's Engagement

Strengthening of the new insolvency regime is an on-going process, which can be facilitated through consultation and discussions. Against this backdrop, FICCI has constituted a dedicated Committee on Stressed Assets.
  • Analyse issues faced by stakeholders in resolution of debt-ridden corporates and framework required to put these companies back on track swiftly
  • Recommend policy/regulatory changes and work with the Government and Regulator (IBBI) for clear, consistent and transparent laws and regulations
  • Dialogue with Government and its agencies for representing industry views to promote ease of doing business in India
  • Organise Conferences and Roundtables in India and abroad to disseminate investment opportunities in stressed assets, drawing interest of foreign investors in IBC
  • Constitute task forces to take up some important issues separately

Timeline

2022
Jan
Press Release

Framework for cross-border insolvency, Code of Conduct high on IBBI's agenda

Explore
Event

5 years of Insolvency and Bankruptcy Code: Looking Forward and Beyond

Explore
2021
Oct
Event

Opportunities for Aircraft Leasing and Financing in GIFT City

Explore
Mar
Press Release

Onus of infrastructure driven growth rests on financial sector - Chief Economic Adviser, GoI

Explore
Event

Digital Conference on Distressed Debt in Indian Infrastructure Sector

Explore
2020
Oct
Press Release

IBC is an evolving process and there is scope for making it more efficient - Chief Economic Adviser, GoI

Explore
Event

Investment Opportunities in Stressed Assets in India

Explore
Sep
Event

Digital Conference on Opportunities for Investment in Stressed Assets in India

Explore
Event

Conference on Opportunities for Investment in Stressed Assets in India

Explore
May
Event

Webinar on Suspension of the Insolvency & Bankruptcy Code - Saving the Sustainable Vs. Revival of Failure

Explore
2019
Jun
Event

Roadshow on India's Insolvency and Bankruptcy Code in Singapore - The Insolvency and Bankruptcy Code of India: New Paradigm for Stressed Assets

Explore
Apr
Event

Conference on Insolvency and Bankruptcy Code of India - New Paradigm for Stressed Assets

Explore
Load More
Events
Events

Jan, 2022

5 years of Insolvency and Bankruptcy Code: Looking Forward and Beyond

Jan 20, 2022, Virtual Platform, 10:30 am to 13:30pm
Explore

Oct, 2021

Opportunities for Aircraft Leasing and Financing in GIFT City

Oct 29, 2021, Virtual Platform, 1600 - 1730 hrs (IST)
Explore

Sep, 2021

Conference on Investment Opportunities for Stressed Assets in India (postponed)

Sep 17, 2021, Virtual Platform, 1000 - 1200 hrs (IST)
Explore

Mar, 2021

Digital Conference on Distressed Debt in Indian Infrastructure Sector

Mar 09, 2021, Virtual Platform
Explore

Oct, 2020

Investment Opportunities in Stressed Assets in India

Oct 14, 2020, Virtual Platform
Explore

Sep, 2020

Digital Conference on Opportunities for Investment in Stressed Assets in India

Sep 22, 2020, Virtual Platform
Explore

Conference on Opportunities for Investment in Stressed Assets in India

Sep 17, 2020, Virtual Platform
Explore

May, 2020

Webinar on Suspension of the Insolvency & Bankruptcy Code - Saving the Sustainable Vs. Revival of Failure

May 25, 2020, Webinar, 03:00 PM - 04:00 PM
Explore

Jun, 2019

Roadshow on India's Insolvency and Bankruptcy Code in Singapore - The Insolvency and Bankruptcy Code of India: New Paradigm for Stressed Assets

Jun 06, 2019, Singapore
Explore

Apr, 2019

Conference on Insolvency and Bankruptcy Code of India - New Paradigm for Stressed Assets

Apr 24, 2019, Hong Kong
Explore
Load More
Chair / Co-Chair

Chair

Mr Shardul Shroff

Executive Chairman
Shardul Amarchand Mangaldas & Co.

Co-Chair

Mr Raj Kumar Bansal

MD & CEO
Edelweiss Asset Reconstruction Company Limited
Media Coverage
Business Standard |

Framework for Cross Border Insolvency to be announced soon under Insolvency & Bankruptcy Code

Ten News |

Framework for Cross-Border Insolvency, Code of conduct high on IBBI's agenda

Live Law |

FICCI & IBBI: Virtual Conference On 5 Years Of Insolvency And Bankruptcy Code

The Telegraph |

Subramanian urges institutions to avoid crony lending

Chief economic Adviser K.V. Subramanian on Tuesday urged financial institutions to avoid crony lending and focus on high quality loans .

“I think it is extremely critical now that the financial sector owns up this responsibility of doing high quality lending, especially on the infrastructure side, and really avoid crony lending... I think that is basically the mantra for the financial sector,” he said at an event organised by FICCI.

He also suggested strengthening corporate governance in the financial sector and linking incentives of the senior management to quality lending. “Incentive mechanisms need to be put in place to prevent crony lending as infrastructure projects involve high gestation periods.”

The CEA said bank auditors cannot shy away from flagging instances of the ever-greening of bad loans and zombie lending.

“Banks need to ensure that capital allocation to the infrastructure sector is to creditworthy borrowers. Crony lending has been a problem in the banking system. The Economic Survey also highlighted that the banking sector’s problems originated from large loans that were not necessarily lent to the most creditworthy borrowers."

He said the problem gets far more accentuated in the context of infrastructure. "Financial institutions especially need to be working on this,” he added.

Subramanian emphasised that “crony lending is the elephant in the room that we have to acknowledge. Financial sector in India has to take responsibility that it is the ultimate arbiter of capital and ensure optimal capital allocation”.

He suggested that compensation of senior management in banks must be curtailed on instances of ever-greening and zombie lending. The board of directors cannot be asleep at the wheel, he said, adding that auditors are the first line of defence.

“Auditors cannot say this is something they cannot do. Data analytics can do. Zombie lending and ever-greening should be avoided as they lead to suboptimal capital allocation,” said Subramanian.

Subramanian said the banking and financial sector was very small compared with the size of the overall economy. “That is mainly because of the financial sector as a whole is still to figure out a model to make large corporate loans and large infrastructure loans in a way that does not lead to non-performing assets," said Subramanian.

Pointing to the poor quality of loans particularly the big ones since the early 1990s, Subramanian said loans were not given to most creditworthy borrowers but to crony capitalists, leading to high distress.

“When the financial sector decides to actually lend to a particular borrower who is more connected even though that borrower may not be the most creditworthy, it means that capital is not being provided. There is an opportunity cost as the capital does not go to a more creditworthy borrower,” he said.

Speaking at the event, Insolvency and Bankruptcy Board of India chairman M.S. Sahoo said out of the 4,000 companies that have been admitted for insolvency, 2,000 companies have completed the process. Resolution of distressed assets is bringing in more value than liquidation, he said, adding that in some companies it has been as high 300 per cent over the liquidation value.

KNN |

Financial sector in India needs to ensure optimal capital allocation: Chief Economic Adviser

Financial sector in India needs to ensure optimal capital allocation to the infrastructure sector is to creditworthy borrowers, said Chief Economic Adviser K V Subramanian.

Speaking on the distress in the infrastructure sector, Dr Subramanian said that since the early 1990s the key problem of the Indian banking sector has been the quality of lending, especially of large loans.

“Banks need to ensure that capital allocation to the infrastructure sector is to creditworthy borrowers. Crony lending has been a problem in the banking system. The Economic Survey also highlighted that the banking sector’s problems originated from large loans that were not necessarily lent to the most creditworthy borrowers. This problem gets far more accentuated in the context of infrastructure. Financial institutions especially need to be working on this,” he said at an event organised by industry chamber FICCI.

Speaking of infrastructure sector, Dr Subramanian further emphasized, “Crony lending is the elephant in the room that we have to acknowledge. Financial sector in India has to take responsibility that it is the ultimate arbiter of capital and ensure optimal capital allocation.”

Subramanian also stressed that there is a significant need for India to focus on infrastructure spending.

Speaking during the event Dr MS Sahoo, Chairperson, Insolvency and Bankruptcy Board of India said that distilling the essence of IBC, and with support of IPs and CoCs, a greater number of EPC companies can accomplish successful resolution under IBC.

''The law is an enabler for a rescue mechanism in the market economy. Stakeholders must be sensitised that value maximisation is not regardless of concerns of others in the ecosystem. There should not be undue fixation on a formula-based computation of liquidation value,” he added.

Business Standard |

Lenders 'can't be asleep', must suffer compensation cut for bad loans: CEA

Senior management of lenders and financial institutions must suffer a be cut in their compensation for crony lending and ever-greening of loans, said the government’s Chief Economic Advisor K V Subramanian on Tuesday.

“Financial sectors should ramp up on its corporate governance and each institution and lender should own up the responsibility. Infrastructure projects are of very long durations so incentives of senior management aligned in such a way that board can’t be asleep on a wheel especially on zombie lending.” he said during a webinar organized by business association FICCI on distressed debt in the infrastructure sector.

Subramanian said ever-greening and zombie loans lead to sub-optimal capital allocation. He also asked auditors to use more data analytics to identify crony lending. “Auditor being the first line of defence on it need to really look at loan by loan and identify zombie lending. There is enough research and data analytics which can be used to trace such instances."

Recognising the bad loans problem in the financial system, he said that it stems from large loans which are not necessarily lent to creditworthy borrowers, though it's a generic issue but far more exacerbated for infrastructure lending. So financial institutions especially need to be working on these aspects and should take a leadership role in making India a $ 5 trillion economy, he said.

Instead of focusing on external factors, they should look internally for projects of infrastructure and capital allocation to be made in high quality. “Capital allocation to the infrastructure sector has to be of high quality and the financial sector has an important role in this regard. The financial sector should refrain from resorting to crony lending, which would put the brakes on lending and the economy will suffer," he explained.

Subramanian said the operational aspects of different projects are different. "Once a loan goes into distress, it blocks capital for credit-worthy borrowers. In such a scenario, the lenders will have to take complete responsibility." He said that the country is placing emphasis on growth through infrastructure.

Live Mint |

Banks must avoid crony lending like the plague: CEA Krishnamurthy Subramanian

Statutory auditors of banks are responsible for detecting the ills plaguing the sector and cannot shy away from flagging instances of evergreening of bad loans and zombie lending that constrained the growth of the financial sector, chief economic adviser Krishnamurthy Subramanian said here on Tuesday.

Lending to cronies in business was resulting in capital flowing to entities that were not the most creditworthy and this impaired the quality of lending on large loans, Subramanian said.

This problem gets exacerbated in case of the infrastructure sector, Subramanian said at a virtual conference on ‘Distressed debt in infrastructure sector with special focus on engineering, procurement and construction’ organized by industry body Federation of Indian Chambers of Commerce and Industry (FICCI).

“This is the elephant in the room that needs to be spoken about. Avoiding crony lending like the plague has to be the mantra for the financial services sector," said Subramanian.

Subramanian’s message comes in the context of a continued rift between auditors and policy makers about the role of statutory auditors. While regulators expect auditors to sniff out the lapses and frauds in their clients, auditors believe their job ends with certifying their clients’ financial statements as a true reflection of their affairs. Audit regulator National Financial Reporting Authority (NFRA) has in the last two years pointed out alleged lapses in the audit of IL&FS Financial Services Ltd (IFIN) by different auditors.

Compensation of senior management in banks has to be curtailed if evergreening and zombie lending is identified, Subramanian suggested. The board of directors cannot be asleep at the wheel, he said. Auditors are the first line of defence on this and they have to comb through loans to identify instances of this, he said.

“Auditors cannot say this is something they cannot do. Data analytics can do. Zombie lending and evergreening should be avoided as they lead to suboptimal capital allocation," Subramanian said.

The banking and financial sector is very small compared to the size of the overall economy on any parameter. “That is mainly because the financial sector as a whole is still to figure out a model to make large corporate loans and large infrastructure loans, which is a subset of that, in a way that does not lead to non-performing assets," Subramanian said.

It is extremely important that the financial sector, the ultimate arbiter of capital, takes the responsibility for ensuring optimal capital allocation in the economy, he said.

As regulatory permissions, land acquisition and environmental clearances are involved in the infrastructure sector, business interactions with agencies create the potential for greater crony lending possibly in this sector, he explained.

Insolvency and Bankruptcy Board of India (IBBI) chairperson M.S. Sahoo explained that even businesses with less assets, such as engineering, procurement, and construction firms have successfully achieved bankruptcy resolution under the Insolvency and Bankruptcy Code (IBC). About 300 of the companies admitted to tribunals for bankruptcy resolution have achieved resolution. On an average, the liquidation values of the assets of these companies were about 22-23% of the claim amounts raised by creditors. On resolution, the creditors were able to recover about 200% of the liquidation value, implying even companies with fewer assets have benefited under the IBC.

Live Mint |

CEA Subramanian stresses on infra-led growth, takes on crony lending

Chief Economic Adviser K V Subramanian on Tuesday exhorted financial institutions to avoid crony lending and focus on high quality loans for creation of assets that will help the country become a USD 5 trillion economy.

Observing that Indian banking sector since the early 1990s faced the problem of poor quality lending especially on large loans, he said, loans were not given to most creditworthy borrowers but to crony capitalists, leading to high distress.

"When the financial sector decides to actually lend to a particular borrower who is more connected even though that borrower may not be the most creditworthy, it means that capital is not being provided. There is an opportunity cost as the capital does not go to a more creditworthy borrower," he said at an event organised by industry chamber FICCI.

It is the duty of the financial sector to ensure that optimal capital allocation happens in the economy, he added.

It is to be noted that the bad loan problem in the banking sector is largely because of high exposure of banks towards infrastructure which was facing problems on several counts.

"I think it is extremely critical now that the financial sector owns up this responsibility of doing high quality lending, especially on the infrastructure side, and really avoid crony lending... I think that is basically the mantra for the financial sector," he advocated.

He also suggested strengthening corporate governance in the financial sector to ensure high quality lending and linking incentives of senior management to quality lending.

"Incentive mechanisms need to be put in place to prevent crony lending as infrastructure projects involve high gestation periods," he added.

Financial institutions should avoid evergreening and zombie lending as it blocks capital for creditworthy borrowers, he added.

Subramanian said that the development of financial institutions will play an important role as infra financing requires very specialised expertise.

The government has proposed to set up a ₹1-lakh crore development financial institution (DFI) to accelerate infrastructure financing activities.

The infrastructure financier, to be called the National Bank for Financing Infrastructure and Development (NaBFID), is to anchor the ambitious National Infrastructure Pipeline (NIP).

About 7,000 projects have been identified under the NIP with a projected investment of a whopping ₹111 lakh crore during 2020-25.

Speaking during the event, Insolvency and Bankruptcy Board of India chairman M S Sahoo said, out of 4,000 companies that have been admitted for insolvency, 2,000 companies have completed the process.

Resolution of distressed assets are bringing in more value than liquidation, he said, adding that in some companies it has been as high 300 per cent over the liquidation value.

The Times of India |

CEA KV Subramanian stresses on infra-led growth, takes on crony lending

The New Indian Express |

Stay away from crony lending, focus on high quality loans: Chief Economic Adviser tells financial institutions

Chief Economic Adviser K V Subramanian on Tuesday exhorted financial institutions to avoid crony lending and focus on high quality loans for creation of assets that will help the country become a USD 5 trillion economy.

Observing that Indian banking sector since the early 1990s faced the problem of poor quality lending especially on large loans, he said, loans were not given to most creditworthy borrowers but to crony capitalists, leading to high distress.

"When the financial sector decides to actually lend to a particular borrower who is more connected even though that borrower may not be the most creditworthy, it means that capital is not being provided.

There is an opportunity cost as the capital does not go to a more creditworthy borrower," he said at an event organised by industry chamber FICCI.

It is the duty of the financial sector to ensure that optimal capital allocation happens in the economy, he added.

It is to be noted that the bad loan problem in the banking sector is largely because of high exposure of banks towards infrastructure which was facing problems on several counts.

"I think it is extremely critical now that the financial sector owns up this responsibility of doing high quality lending, especially on the infrastructure side, and really avoid crony lending. I think that is basically the mantra for the financial sector," he advocated.

He also suggested strengthening corporate governance in the financial sector to ensure high quality lending and linking incentives of senior management to quality lending.

"Incentive mechanisms need to be put in place to prevent crony lending as infrastructure projects involve high gestation periods," he added.

Financial institutions should avoid evergreening and zombie lending as it blocks capital for creditworthy borrowers, he added.

Subramanian said that the development of financial institutions will play an important role as infra financing requires very specialised expertise.

The government has proposed to set up a Rs 1-lakh crore development financial institution (DFI) to accelerate infrastructure financing activities.

The infrastructure financier, to be called the National Bank for Financing Infrastructure and Development (NaBFID), is to anchor the ambitious National Infrastructure Pipeline (NIP).

About 7,000 projects have been identified under the NIP with a projected investment of a whopping Rs 111 lakh crore during 2020-25.

Speaking during the event, Insolvency and Bankruptcy Board of India chairman M S Sahoo said, out of 4,000 companies that have been admitted for insolvency, 2,000 companies have completed the process.

Resolution of distressed assets are bringing in more value than liquidation, he said, adding that in some companies it has been as high 300 per cent over the liquidation value.

Deccan Herald |

CEA Subramanian stresses on infra-led growth, takes on crony lending

Business Today |

CEA Subramanian calls for action against 'crony lending' in infra sector

Chief Economic Advisor (CEA) K Subramanian on Tuesday called for provision for clawing back compensation and incentives of top management in the financial sector in case evidence of 'crony lending' is found against them.
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Calling crony lending a "big problem", K Subramanian said, "The job of the financial sector is to do optimal capital allocation in the economy. Since 90s the key problem is of quality of lending in case of large loans. The exact word is crony lending. We have shown in the economic survey that over the years the non-performing assets (NPAs) have emerged from the large loans that have not necessarily been lent to the most credit borrowers." Subramanian was speaking at a webinar organised by the Federation of Indian Chamber of Commerce and Industries (Ficci) on distressed debt in Indian infrastructure.

"This is a generic problem in the financial sector but gets far more exacerbated in infrastructure lending," Subramanian added.

Calling upon the financial sector to put an end to the practice of evergreening and zombie lending, Subramanian said, "Zombie lending and evergreening needs to be avoided as it leads to sub-optimal capital allocation to projects. With this more capital follows the undeserving projects than the deserving ones."

He went on to suggest that since tools are now available to identify whether such practices were done in the past, there should be provision wherein "compensation to the senior management should be clawed back."

"Adverse selection problems is all about choosing to give a loan to a crony rather than a more credit-worthy borrower. The financial sector needs to grapple with this issue. Every financial institution has to take that leadership role and not look at the external factors and ensure that the capital allocation in the economy especially in infrastructure is of high quality," said Subramanian.

The CEA's observations come at a time when the government has enhanced allocation for infrastructure sector in the budget, and is betting big on capital expenditure for economic revival post Covid disruptions.

CNBC TV18 |

CEA stresses on infra-led growth, takes on crony lending

The financial sector will have to play an important role in infrastructure lending which needs specialised expertise, Chief Economic Adviser KV Subramanian said on Tuesday. Speaking at a webinar organised by FICCI, Subramanian said that for India to become a USD 5 trillion economy, capital allocation to the infrastructure sector should be of high quality.

”Capital allocation to the infrastructure sector has to be of high quality and the financial sector has an important role in this regard. The financial sector should refrain from resorting to crony lending, which would put the brakes on lending and the economy will suffer,” he said. Subramanian said the operational aspects of different projects are different. ”Once a loan goes into distress, it blocks capital for credit-worthy borrowers. In such a scenario, the lenders will have to take complete responsibility.” He said that the country is placing emphasis on growth through infrastructure.

”This places responsibility on the financial sector. The sector has to see that there should not be a sub-optimal allocation of capital. Even if distress takes place, the right things have to be done. Analytics can be used to identify crony lending,” he said.

The senior management of the financial institutions would have to incentivised to prevent crony lending, Subramanian said. ”Incentive mechanisms need to be put in place to prevent crony lending as infrastructure projects involve high gestation periods,” he added.

Outlook |

CEA stresses on infra-led growth, takes on crony lending

The financial sector will have to play an important role in infrastructure lending which needs specialised expertise, Chief Economic Adviser KV Subramanian said on Tuesday.
Speaking at a webinar organised by FICCI, Subramanian said that for India to become a USD 5 trillion economy, capital allocation to the infrastructure sector should be of high quality.

"Capital allocation to the infrastructure sector has to be of high quality and the financial sector has an important role in this regard. The financial sector should refrain from resorting to crony lending, which would put the brakes on lending and the economy will suffer," he said.

Subramanian said the operational aspects of different projects are different. "Once a loan goes into distress, it blocks capital for credit-worthy borrowers. In such a scenario, the lenders will have to take complete responsibility."

He said that the country is placing emphasis on growth through infrastructure.

"This places responsibility on the financial sector. The sector has to see that there should not be a sub-optimal allocation of capital. Even if distress takes place, the right things have to be done. Analytics can be used to identify crony lending," he said.

The senior management of the financial institutions would have to incentivised to prevent crony lending, Subramanian said.

"Incentive mechanisms need to be put in place to prevent crony lending as infrastructure projects involve high gestation periods," he added.

United News of India |

Onus of infrastructure driven growth rests on financial sector: Chief Economic Advisor, GoI

Money Control |

Stay away from crony lending, focus on high quality loans: CEA K V Subramanian tells financial institutions

Chief Economic Adviser K V Subramanian on Tuesday exhorted financial institutions to avoid crony lending and focus on high quality loans for creation of assets that will help the country become a $5 trillion economy.

Observing that Indian banking sector since the early 1990s faced the problem of poor quality lending especially on large loans, he said, loans were not given to most creditworthy borrowers but to crony capitalists, leading to high distress.

"When the financial sector decides to actually lend to a particular borrower who is more connected even though that borrower may not be the most creditworthy, it means that capital is not being provided. There is an opportunity cost as the capital does not go to a more creditworthy borrower," he said at an event organised by industry chamber FICCI.

It is the duty of the financial sector to ensure that optimal capital allocation happens in the economy, he added.

It is to be noted that the bad loan problem in the banking sector is largely because of high exposure of banks towards infrastructure which was facing problems on several counts.

"I think it is extremely critical now that the financial sector owns up this responsibility of doing high quality lending, especially on the infrastructure side, and really avoid crony lending... I think that is basically the mantra for the financial sector," he advocated.

He also suggested strengthening corporate governance in the financial sector to ensure high quality lending and linking incentives of senior management to quality lending.

"Incentive mechanisms need to be put in place to prevent crony lending as infrastructure projects involve high gestation periods," he added.

Financial institutions should avoid evergreening and zombie lending as it blocks capital for creditworthy borrowers, he added.

Subramanian said that the development of financial institutions will play an important role as infra financing requires very specialised expertise.

The government has proposed to set up a Rs 1-lakh crore development financial institution (DFI) to accelerate infrastructure financing activities.

The infrastructure financier, to be called the National Bank for Financing Infrastructure and Development (NaBFID), is to anchor the ambitious National Infrastructure Pipeline (NIP).

About 7,000 projects have been identified under the NIP with a projected investment of a whopping Rs 111 lakh crore during 2020-25.

Speaking during the event, Insolvency and Bankruptcy Board of India chairman M S Sahoo said, out of 4,000 companies that have been admitted for insolvency, 2,000 companies have completed the process.

Resolution of distressed assets are bringing in more value than liquidation, he said, adding that in some companies it has been as high 300 per cent over the liquidation value.

Yahoo Finance |

CEA stresses on infra-led growth, takes on crony lending

The financial sector will have to play an important role in infrastructure lending which needs specialised expertise, Chief Economic Adviser KV Subramanian said on Tuesday.

Speaking at a webinar organised by FICCI, Subramanian said that for India to become a USD 5 trillion economy, capital allocation to the infrastructure sector should be of high quality.

'Capital allocation to the infrastructure sector has to be of high quality and the financial sector has an important role in this regard. The financial sector should refrain from resorting to crony lending, which would put the brakes on lending and the economy will suffer,' he said.

Subramanian said the operational aspects of different projects are different. 'Once a loan goes into distress, it blocks capital for credit-worthy borrowers. In such a scenario, the lenders will have to take complete responsibility.' He said that the country is placing emphasis on growth through infrastructure.

'This places responsibility on the financial sector.

The sector has to see that there should not be a sub-optimal allocation of capital. Even if distress takes place, the right things have to be done. Analytics can be used to identify crony lending,' he said.

The senior management of the financial institutions would have to incentivised to prevent crony lending, Subramanian said.

'Incentive mechanisms need to be put in place to prevent crony lending as infrastructure projects involve high gestation periods,' he added.

Financial Samachar |

Onus of infrastructure driven growth rests on financial sector - Chief Economic Adviser, GoI

Addressing the virtual session on ‘Distressed Debt in Indian Infrastructure Sector – Special focus on EPC’, organized by FICCI, Dr Subramanian said that the country is now focusing on growth through infrastructure in a sustained manner. “This is the time when the financial sector should take leadership role and assume the onerous responsibility for infrastructure growth. For the macro economy, financial sector plays a very critical role,” he added.

Speaking on the distress in the infrastructure sector, Dr Subramanian said that since the early 1990s the key problem of the Indian banking sector has been the quality of lending, especially of large loans.

“Banks need to ensure that capital allocation to the infrastructure sector is to credit worthy borrowers. Crony lending has been a problem in the banking system. The Economic Survey also highlighted that the banking sector’s problems originated from large loans that were not necessarily lent to the most credit worthy borrowers. This problem gets far more accentuated in the context of infrastructure. Financial institutions especially need to be working on this,” he added.

Speaking of infrastructure sector, Dr Subramanian further emphasized, “Crony lending is the elephant in the room that we have to acknowledge. Financial sector in India has to take responsibility that it is the ultimate arbiter of capital and ensure optimal capital allocation.”

Dr MS Sahoo, Chairperson, Insolvency and Bankruptcy Board of India said that distilling the essence of IBC, and with support of IPs and CoCs, a greater number of EPC companies can accomplish successful resolution under IBC. The law is an enabler for a rescue mechanism in the market economy. “Stakeholders must be sensitised that value maximisation is not regardless of concerns of others in the ecosystem. There should not be undue fixation on a formula-based computation of liquidation value,” he added.

Mr Rashesh Shah, Past President, FICCI and Chairman & CEO, Edelweiss Group said that infrastructure is the biggest opportunity as well as the biggest challenge in India as we go forward. India has been grappling with the problem of how to divert more long-term capital because this is what the infrastructure sector needs, and the key challenge is to complete the pending infra projects. “REITs, InvITs and Infrastructure debt funds are the new sources of capital in infrastructure sector. Capital infusion and financial engineering would ensure that stressed assets start generating value once again. We have to focus more and more on revival and not just on recoveries and ensure balanced outcome for all stakeholders,” he added.

Mr Shailesh Pathak, CEO, L&T Infrastructure Development Projects Ltd said that in the next 10 years we will see an unprecedented wave of infrastructure constructions. Referring to the recent announcements in the budget, he said, “Asset recycling and asset monetization are welcome steps. It is the government’s rupee that will drive construction and it is the international dollar that will re-finance the government’s rupee.”

Mr Pathak further underscored that contract enforcement and dispute resolution need to be expedited for preventing stress in the EPC sector.

Mr Annat Jain, Founder & MD, Payard Investments said that India cannot achieve its infrastructure ambitions while hundreds of its EPC companies are languishing in insolvency. “Insolvent EPC companies are unique, they own almost no assets of any tangible value, but have disproportionately large fund-based liabilities, itself an outcome of delayed payments from government clients. There is enough recent evidence to show that liquidation of EPC companies in India yields catastrophic outcomes,” he added.

He further added that it would be in the interest of all stakeholders to create fair, practical and innovative resolution plans which can rescue EPC companies from liquidation and simultaneously maximize recoveries for the company’s long-suffering creditors.

Mr Dilip Chenoy, Secretary General, FICCI said that infrastructure is a key pillar of the Indian economy and has always been recognized as one of the most important enablers of economic growth. “Development of this sector assumes significance at this juncture, and it is bound to play a pivotal role going forward,” he added.

India Narrative |

Quality of lending has been a key problem: CEA Subramanian

India is now focusing on growth through infrastructure in a sustained manner, chief economic adviser KV Subramanian said.

“This is the time when the financial sector should take leadership role and assume the onerous responsibility for infrastructure growth. For the macro economy, financial sector plays a very critical role,” he said, while addressing a virtual session on ‘Distressed Debt in Indian Infrastructure Sector – Special focus on EPC’, organized by industry body FICCI.

Speaking on distress in the infrastructure sector, Subramanian said that since the early 1990s the key problem of the Indian banking sector has been the quality of lending, especially pertaining to large ticket loans.

“Banks need to ensure that capital allocation to the infrastructure sector is to credit-worthy borrowers. Crony lending has been a problem in the banking system. The Economic Survey also highlighted that the banking sector’s problems originated from large loans that were not necessarily lent to the most credit-worthy borrowers. This problem gets far more accentuated in the context of infrastructure. Financial institutions especially need to be working on this,” he added.

Subramanian also said that crony lending has been one of the key challenges. “Financial sector in India has to take responsibility that it is the ultimate arbiter of capital and ensure optimal capital allocation,” he said.

India Right to Now News |

CEA Subramanian stresses on infra-led growth, takes on crony lending

The financial sector will have to play an important role in infrastructure lending which needs specialised expertise, Chief Economic Adviser KV Subramanian said on Tuesday.

Speaking at a webinar organised by FICCI, Subramanian said that for India to become a USD 5 trillion economy, capital allocation to the infrastructure sector should be of high quality.

“Capital allocation to the infrastructure sector has to be of high quality and the financial sector has an important role in this regard. The financial sector should refrain from resorting to crony lending, which would put the brakes on lending and the economy will suffer,” he said.

Subramanian said the operational aspects of different projects are different. “Once a loan goes into distress, it blocks capital for credit-worthy borrowers. In such a scenario, the lenders will have to take complete responsibility.”

He said that the country is placing emphasis on growth through infrastructure.

“This places responsibility on the financial sector. The sector has to see that there should not be a sub-optimal allocation of capital. Even if distress takes place, the right things have to be done. Analytics can be used to identify crony lending,” he said.

The senior management of the financial institutions would have to incentivised to prevent crony lending, Subramanian said.

“Incentive mechanisms need to be put in place to prevent crony lending as infrastructure projects involve high gestation periods,” he added.

One India |

CEA stresses on infra-led growth, takes on crony lending

Speaking at a webinar organised by FICCI, Subramanian said that for India to become a USD 5 trillion economy, capital allocation to the infrastructure sector should be of high quality.

"Capital allocation to the infrastructure sector has to be of high quality and the financial sector has an important role in this regard. The financial sector should refrain from resorting to crony lending, which would put the brakes on lending and the economy will suffer," he said.

Subramanian said the operational aspects of different projects are different. "Once a loan goes into distress, it blocks capital for credit-worthy borrowers. In such a scenario, the lenders will have to take complete responsibility."

He said that the country is placing emphasis on growth through infrastructure.

"This places responsibility on the financial sector. The sector has to see that there should not be a sub-optimal allocation of capital. Even if distress takes place, the right things have to be done. Analytics can be used to identify crony lending," he said.

The senior management of the financial institutions would have to incentivised to prevent crony lending, Subramanian said.

"Incentive mechanisms need to be put in place to prevent crony lending as infrastructure projects involve high gestation periods," he added.

Devdiscourse |

CEA stresses on infra-led growth, takes on crony lending

The financial sector will have to play an important role in infrastructure lending which needs specialised expertise, Chief Economic Adviser KV Subramanian said on Tuesday.

Speaking at a webinar organised by FICCI, Subramanian said that for India to become a USD 5 trillion economy, capital allocation to the infrastructure sector should be of high quality.

''Capital allocation to the infrastructure sector has to be of high quality and the financial sector has an important role in this regard. The financial sector should refrain from resorting to crony lending, which would put the brakes on lending and the economy will suffer,'' he said.

Subramanian said the operational aspects of different projects are different. ''Once a loan goes into distress, it blocks capital for credit-worthy borrowers. In such a scenario, the lenders will have to take complete responsibility.'' He said that the country is placing emphasis on growth through infrastructure.

''This places responsibility on the financial sector.

The sector has to see that there should not be a sub-optimal allocation of capital. Even if distress takes place, the right things have to be done. Analytics can be used to identify crony lending,'' he said.

The senior management of the financial institutions would have to incentivised to prevent crony lending, Subramanian said.

''Incentive mechanisms need to be put in place to prevent crony lending as infrastructure projects involve high gestation periods,'' he added.

News Matters |

CEA stresses on infra-led growth, takes on crony lending

The monetary sector must play an vital function in infrastructure lending which wants specialised experience, Chief Financial Adviser KV Subramanian mentioned on Tuesday.

Talking at a webinar organised by FICCI, Subramanian mentioned that for India to develop into a USD 5 trillion financial system, capital allocation to the infrastructure sector must be of top of the range.

“Capital allocation to the infrastructure sector needs to be of top of the range and the monetary sector has an vital function on this regard. The monetary sector ought to chorus from resorting to crony lending, which might put the brakes on lending and the financial system will endure,” he mentioned.

Subramanian mentioned the operational elements of various tasks are totally different. “As soon as a mortgage goes into misery, it blocks capital for credit-worthy debtors. In such a situation, the lenders must take full duty.”

He mentioned that the nation is inserting emphasis on development via infrastructure.

“This locations duty on the monetary sector. The sector has to see that there shouldn’t be a sub-optimal allocation of capital. Even when misery takes place, the precise issues must be accomplished. Analytics can be utilized to determine crony lending,” he mentioned.

The senior administration of the monetary establishments must incentivised to stop crony lending, Subramanian mentioned.

“Incentive mechanisms must be put in place to stop crony lending as infrastructure tasks contain excessive gestation intervals,” he added.

Skssdaily News |

CEA Subramanian stresses on infra-led development, takes on crony lending

Chief Financial Adviser Ok V Subramanian on Tuesday exhorted monetary establishments to keep away from crony lending and concentrate on prime quality loans for creation of belongings that can assist the nation develop into a $5 trillion financial system.

Observing that Indian banking sector for the reason that early Nineteen Nineties confronted the issue of poor high quality lending particularly on massive loans, he stated, loans weren’t given to most creditworthy debtors however to crony capitalists, resulting in excessive misery.

“When the monetary sector decides to really lend to a selected borrower who’s extra related though that borrower is probably not essentially the most creditworthy, it signifies that capital isn’t being supplied. There is a chance price because the capital doesn’t go to a extra creditworthy borrower,” he stated at an occasion organised by trade chamber FICCI.

It’s the obligation of the monetary sector to make sure that optimum capital allocation occurs within the financial system, he added.

It’s to be famous that the dangerous mortgage downside within the banking sector is essentially due to excessive publicity of banks in direction of infrastructure which was dealing with issues on a number of counts.

“I believe this can be very essential now that the monetary sector owns up this duty of doing prime quality lending, particularly on the infrastructure aspect, and actually keep away from crony lending… I believe that’s mainly the mantra for the monetary sector,” he advocated.

He additionally urged strengthening company governance within the monetary sector to make sure prime quality lending and linking incentives of senior administration to high quality lending.

“Incentive mechanisms must be put in place to forestall crony lending as infrastructure initiatives contain excessive gestation durations,” he added.

Monetary establishments ought to keep away from evergreening and zombie lending because it blocks capital for creditworthy debtors, he added.

Subramanian stated that the event of economic establishments will play an necessary function as infra financing requires very specialised experience.

The federal government has proposed to arrange a Rs 1-lakh crore improvement monetary establishment (DFI) to speed up infrastructure financing actions.

The infrastructure financier, to be known as the Nationwide Financial institution for Financing Infrastructure and Growth (NaBFID), is to anchor the bold Nationwide Infrastructure Pipeline (NIP).

About 7,000 initiatives have been recognized beneath the NIP with a projected funding of a whopping Rs 111 lakh crore throughout 2020-25.

Talking in the course of the occasion, Insolvency and Chapter Board of India chairman M S Sahoo stated, out of 4,000 firms which were admitted for insolvency, 2,000 firms have accomplished the method.

Decision of distressed belongings are bringing in additional worth than liquidation, he stated, including that in some firms it has been as excessive 300 per cent over the liquidation worth.

Money9 |

Stay away from crony lending, focus on high-quality loans: CEA K V Subramanian tells financial institutions

Chief Economic Adviser K V Subramanian on March 9 exhorted financial institutions to avoid crony lending and focus on high-quality loans for the creation of assets that will help the country become a $5 trillion economy.

Observing that the Indian banking sector since the early 1990s faced the problem of poor quality lending especially on large loans, he said, loans were not given to most creditworthy borrowers but to crony capitalists, leading to high distress.

“When the financial sector decides to actually lend to a particular borrower who is more connected even though that borrower may not be the most creditworthy, it means that capital is not being provided. There is an opportunity cost as the capital does not go to a more creditworthy borrower,” he said at an event organised by industry chamber FICCI.

It is the duty of the financial sector to ensure that optimal capital allocation happens in the economy, he added.

It is to be noted that the bad loan problem in the banking sector is largely because of high exposure of banks towards infrastructure which was facing problems on several counts.

“I think it is extremely critical now that the financial sector owns up this responsibility of doing high-quality lending, especially on the infrastructure side, and really avoid crony lending… I think that is basically the mantra for the financial sector,” he advocated.

He also suggested strengthening corporate governance in the financial sector to ensure high-quality lending and linking incentives of senior management to quality lending.

“Incentive mechanisms need to be put in place to prevent crony lending as infrastructure projects involve high gestation periods,” he added.

Financial institutions should avoid evergreening and zombie lending as it blocks capital for creditworthy borrowers, he added.

Subramanian said that the development of financial institutions will play an important role as infra financing requires very specialised expertise.

The government has proposed to set up a Rs 1-lakh crore development financial institution (DFI) to accelerate infrastructure financing activities.

The infrastructure financier, to be called the National Bank for Financing Infrastructure and Development (NaBFID), is to anchor the ambitious National Infrastructure Pipeline (NIP).

About 7,000 projects have been identified under the NIP with a projected investment of a whopping Rs 111 lakh crore during 2020-25.

Speaking during the event, Insolvency and Bankruptcy Board of India chairman M S Sahoo said, out of 4,000 companies that have been admitted for insolvency, 2,000 companies have completed the process.

Resolution of distressed assets are bringing in more value than liquidation, he said, adding that in some companies it has been as high 300% over the liquidation value.

The Hawk |

CEA Subramanian stresses on infra-led growth, takes on crony lending

Chief Economic Adviser K V Subramanian on Tuesday exhorted financial institutions to avoid crony lending and focus on high quality loans for creation of assets that will help the country become a $5 trillion economy.

Observing that Indian banking sector since the early 1990s faced the problem of poor quality lending especially on large loans, he said, loans were not given to most creditworthy borrowers but to crony capitalists, leading to high distress.

"When the financial sector decides to actually lend to a particular borrower who is more connected even though that borrower may not be the most creditworthy, it means that capital is not being provided. There is an opportunity cost as the capital does not go to a more creditworthy borrower," he said at an event organised by industry chamber FICCI.

It is the duty of the financial sector to ensure that optimal capital allocation happens in the economy, he added.

It is to be noted that the bad loan problem in the banking sector is largely because of high exposure of banks towards infrastructure which was facing problems on several counts.

"I think it is extremely critical now that the financial sector owns up this responsibility of doing high quality lending, especially on the infrastructure side, and really avoid crony lending... I think that is basically the mantra for the financial sector," he advocated.

He also suggested strengthening corporate governance in the financial sector to ensure high quality lending and linking incentives of senior management to quality lending.

"Incentive mechanisms need to be put in place to prevent crony lending as infrastructure projects involve high gestation periods," he added.

Financial institutions should avoid evergreening and zombie lending as it blocks capital for creditworthy borrowers, he added.

Subramanian said that the development of financial institutions will play an important role as infra financing requires very specialised expertise.

The government has proposed to set up a Rs 1-lakh crore development financial institution (DFI) to accelerate infrastructure financing activities.

The infrastructure financier, to be called the National Bank for Financing Infrastructure and Development (NaBFID), is to anchor the ambitious National Infrastructure Pipeline (NIP).

About 7,000 projects have been identified under the NIP with a projected investment of a whopping Rs 111 lakh crore during 2020-25.

Speaking during the event, Insolvency and Bankruptcy Board of India chairman M S Sahoo said, out of 4,000 companies that have been admitted for insolvency, 2,000 companies have completed the process.

Resolution of distressed assets are bringing in more value than liquidation, he said, adding that in some companies it has been as high 300 per cent over the liquidation value.

Business Standard |

CEA Subramanian stresses on infra-led growth, takes on crony lending

Chief Economic Adviser K V Subramanian on Tuesday exhorted financial institutions to avoid crony lending and focus on high quality loans for creation of assets that will help the country become a $5 trillion economy.

Observing that Indian banking sector since the early 1990s faced the problem of poor quality lending especially on large loans, he said, loans were not given to most creditworthy borrowers but to crony capitalists, leading to high distress.

"When the financial sector decides to actually lend to a particular borrower who is more connected even though that borrower may not be the most creditworthy, it means that capital is not being provided. There is an opportunity cost as the capital does not go to a more creditworthy borrower," he said at an event organised by industry chamber FICCI.

It is the duty of the financial sector to ensure that optimal capital allocation happens in the economy, he added.

It is to be noted that the bad loan problem in the banking sector is largely because of high exposure of banks towards infrastructure which was facing problems on several counts.

"I think it is extremely critical now that the financial sector owns up this responsibility of doing high quality lending, especially on the infrastructure side, and really avoid crony lending... I think that is basically the mantra for the financial sector," he advocated.

He also suggested strengthening corporate governance in the financial sector to ensure high quality lending and linking incentives of senior management to quality lending.

"Incentive mechanisms need to be put in place to prevent crony lending as infrastructure projects involve high gestation periods," he added.

Financial institutions should avoid evergreening and zombie lending as it blocks capital for creditworthy borrowers, he added.

Subramanian said that the development of financial institutions will play an important role as infra financing requires very specialised expertise.

The government has proposed to set up a Rs 1-lakh crore development financial institution (DFI) to accelerate infrastructure financing activities.

The infrastructure financier, to be called the National Bank for Financing Infrastructure and Development (NaBFID), is to anchor the ambitious National Infrastructure Pipeline (NIP).

About 7,000 projects have been identified under the NIP with a projected investment of a whopping Rs 111 lakh crore during 2020-25.

Speaking during the event, Insolvency and Bankruptcy Board of India chairman M S Sahoo said, out of 4,000 companies that have been admitted for insolvency, 2,000 companies have completed the process.

Resolution of distressed assets are bringing in more value than liquidation, he said, adding that in some companies it has been as high 300 per cent over the liquidation value.

Financial Express |

Stay away from crony lending, focus on high quality loans: CEA tells financial institutions

Stay away from crony lending, focus on high quality loans: CEA tells financial institutions

The financial sector will have to play an important role in infrastructure lending which needs specialised expertise, Chief Economic Adviser KV Subramanian said on Tuesday.

Speaking at a webinar organised by FICCI, Subramanian said that for India to become a USD 5 trillion economy, capital allocation to the infrastructure sector should be of high quality.

“Capital allocation to the infrastructure sector has to be of high quality and the financial sector has an important role in this regard. The financial sector should refrain from resorting to crony lending, which would put the brakes on lending and the economy will suffer,” he said.

Subramanian said the operational aspects of different projects are different. “Once a loan goes into distress, it blocks capital for credit-worthy borrowers. In such a scenario, the lenders will have to take complete responsibility.”

He said that the country is placing emphasis on growth through infrastructure.

“This places responsibility on the financial sector. The sector has to see that there should not be a sub-optimal allocation of capital. Even if distress takes place, the right things have to be done. Analytics can be used to identify crony lending,” he said.

The senior management of the financial institutions would have to incentivised to prevent crony lending, Subramanian said.

“Incentive mechanisms need to be put in place to prevent crony lending as infrastructure projects involve high gestation periods,” he added.

Orissa Diary |

Onus of infrastructure driven growth rests on financial sector - Chief Economic Adviser, GoI

Dr KV Subramanian, Chief Economic Adviser, Govt of India today stressed that there is a significant need for India to focus on infrastructure spending.
Addressing the virtual session on ‘Distressed Debt in Indian Infrastructure Sector – Special focus on EPC’, organized by FICCI, Dr Subramanian said that the country is now focusing on growth through infrastructure in a sustained manner. “This is the time when the financial sector should take leadership role and assume the onerous responsibility for infrastructure growth. For the macro economy, financial sector plays a very critical role,” he added.

Speaking on the distress in the infrastructure sector, Dr Subramanian said that since the early 1990s the key problem of the Indian banking sector has been the quality of lending, especially of large loans.

“Banks need to ensure that capital allocation to the infrastructure sector is to credit worthy borrowers. Crony lending has been a problem in the banking system. The Economic Survey also highlighted that the banking sector’s problems originated from large loans that were not necessarily lent to the most credit worthy borrowers. This problem gets far more accentuated in the context of infrastructure. Financial institutions especially need to be working on this,” he added.

Speaking of infrastructure sector, Dr Subramanian further emphasized, “Crony lending is the elephant in the room that we have to acknowledge. Financial sector in India has to take responsibility that it is the ultimate arbiter of capital and ensure optimal capital allocation.”

Dr MS Sahoo, Chairperson, Insolvency and Bankruptcy Board of India said that distilling the essence of IBC, and with support of IPs and CoCs, a greater number of EPC companies can accomplish successful resolution under IBC. The law is an enabler for a rescue mechanism in the market economy. “Stakeholders must be sensitised that value maximisation is not regardless of concerns of others in the ecosystem. There should not be undue fixation on a formula-based computation of liquidation value,” he added.

Mr Rashesh Shah, Past President, FICCI and Chairman & CEO, Edelweiss Group said that infrastructure is the biggest opportunity as well as the biggest challenge in India as we go forward. India has been grappling with the problem of how to divert more long-term capital because this is what the infrastructure sector needs, and the key challenge is to complete the pending infra projects. “REITs, InvITs and Infrastructure debt funds are the new sources of capital in infrastructure sector. Capital infusion and financial engineering would ensure that stressed assets start generating value once again. We have to focus more and more on revival and not just on recoveries and ensure balanced outcome for all stakeholders,” he added.

Mr Shailesh Pathak, CEO, L&T Infrastructure Development Projects Ltd said that in the next 10 years we will see an unprecedented wave of infrastructure constructions. Referring to the recent announcements in the budget, he said, “Asset recycling and asset monetization are welcome steps. It is the government’s rupee that will drive construction and it is the international dollar that will re-finance the government’s rupee.”

Mr Pathak further underscored that contract enforcement and dispute resolution need to be expedited for preventing stress in the EPC sector.

Mr Annat Jain, Founder & MD, Payard Investments said that India cannot achieve its infrastructure ambitions while hundreds of its EPC companies are languishing in insolvency. “Insolvent EPC companies are unique, they own almost no assets of any tangible value, but have disproportionately large fund-based liabilities, itself an outcome of delayed payments from government clients. There is enough recent evidence to show that liquidation of EPC companies in India yields catastrophic outcomes,” he added.

He further added that it would be in the interest of all stakeholders to create fair, practical and innovative resolution plans which can rescue EPC companies from liquidation and simultaneously maximize recoveries for the company’s long-suffering creditors.

Mr Dilip Chenoy, Secretary General, FICCI said that infrastructure is a key pillar of the Indian economy and has always been recognized as one of the most important enablers of economic growth. “Development of this sector assumes significance at this juncture, and it is bound to play a pivotal role going forward,” he added.

Orissa Diary |

IBC is an evolving process and there is scope for making it more efficient - Chief Economic Adviser, Govt of India

Dr Krishnamurthy Subramanian, Chief Economic Adviser, Govt of India today said, “IBC is an evolving process and there is scope for making it far more efficient. It is definitely an important step in the right direction.”
Addressing a virtual session ‘Investment Opportunities In Stressed Assets In India’, organized by FICCI, Dr Subramanian said, “Given the stress that had built up in the financial sector before we entered the crisis, we will now have to take care of some stress that will inevitably happen because of COVID-19. The eco-system of creative destruction is a very important part of any economy.”

In order to make the distressed assets market to flourish in the Indian context, Dr Subramanian said that we need to focus on incentives for banks, especially public sector banks, along with establishing a market for price discovery of stressed assets.

He further highlighted that when a company goes into distress, judgment is involved in order to avoid the under-investment problem. “With the involvement of judgement, there is always a possibility of hindsight bias which can create enormous risk aversion. Judgement and investigation that does not take into account some of these nuances can make it difficult for the bankers to do what is economically efficient,” Dr Subramanian noted.

Emphasizing the importance of establishing a market for price discovery of stressed assets, he said that without this, the process of taking the haircut itself becomes difficult. “This is where distressed funds play an important role. Also, the corporate bond market that enables the distressed companies, for the loans and bonds to be traded also becomes important.” Highlighting the US case of having a market for price discovery, he said that there are some important market failures which we have in the creative destruction process which we need to focus, added Dr Subramanian.

Mr Sudhaker Shukla, Whole Time Member, Insolvency and Bankruptcy Board of India (IBBI) said that emphasized that the economic analysis from emerging data shows that India can have V-shaped recovery. “One should be assured that we are at the right path of the recovery. There would be certain sectors which would be still under stress, hence there is a need for sectoral analysis to be done of those sectors,” he added.

Mr Shukla also informed that IBBI is developing a platform for stressed assets and eventually will have auction platform as well through which investors can easily find all information about the investment potential. “The virtual data room has been launched on 1st October and the auction facility will be available in another 6 months. I invite you (investors) to participate in the encouraging development story of India,” he added.

While highlighting the World Bank’s reports on Ease of Doing Business which mentions that the average time taken to resolve insolvency case in India has come down from 4.5-3 years to 1.6 years now. “All indicators suggest that India is the best performer in South Asia, and comparable in results emanating from the OECD countries,” Mr Shukla emphasized.

Highlighting on the IBC process, he said that pre-IBC, the regime was scattered but now IBC has brought regulatory certainty along with time-bound processes. “All loopholes have been plugged in so this is a responsive regime. This is the reform by stakeholders, of the stakeholders and for the stakeholders,” he added.

Mr Pavan Kapoor, Ambassador of India to UAE said that India and Abu Dhabi share a very strong bilateral relation complemented by high-level exchanges which happened in the last few years. “The establishment of a comprehensive strategic partnership has brought the countries closer resulting in deeper economic integration,” he added.

Mr Kapoor also said that with the recent policy reforms and the IBC, there is a lot of potential for UAE investors to invest in Indian stressed assets and reap the benefits.

Mr Rashesh Shah, Past President, FICCI and Chairman & CEO, Edelweiss Group said that in India, there is no problem of assets under stress but it is the promoters or company’s balance sheet which is stressed. “There is a lot of potential in the revival of these assets with good returns. These assets only need new capital structure,” he said.

Mr Shardul Shroff, Chairman, FICCI National Committee on Stressed Assets and Executive Chairman, Shardul Amarchand Mangaldas & Co, Advocates & Solicitors said that India has moved up dramatically in the Ease of Doing index in the world. “The opportunities in the Indian context are massive,” he added.

Mr Nikhil Shah, MD, Alvarez & Marsal India explained in detail the key ingredients for a successful investment strategy in stressed sector in India.

Mr Dilip Chenoy, Secretary General, FICCI also shared his perspective on the investment opportunities in stressed assets in India.

Business Standard |

Temporary impact on investment flow to India due to govt curbs: CEA

There will be a temporary impact on investment flow to start-ups due to the curbs imposed by the government to stop opportunistic takeover by firms from countries with which India has border tensions, Chief Economic Adviser K V Subramanian said on Wednesday.

According to a Press Note 3 issued by the Department for Promotion of Industry and Internal Trade (DPIIT) in April, a company or an individual from a country that shares land border with India can invest in any sector here only after getting government approval.

The decision has bearing on foreign investments from countries like China and Hong Kong.

Speaking at a virtual event organized by FICCI, Subramanian said investment, both direct and indirect, coming from countries, especially with which India has border tensions, needs to be scrutinised.

As a result, he said, "There will be some impact on start-up funding in the short run, but I do think that space will get filled by a large number of private equity (PE) companies from other countries."

He was replying to a question on if Press Note 3 will have any impact on investment flow from Hong Kong.

PE firms from other countries are interested in participating in the start-up ecosystem, he said, adding that "I expect this impact to be temporary".

India received FDI worth USD 2.34 billion (Rs 14,846 crore) from China between April 2000 and December 2019.

Speaking on insolvency and bankruptcy process, Subramanian said the ecosystem of creative destruction is important for any economy.

"IBC (Insolvency and Bankruptcy Code) process is an evolving process and there is still scope for making it more efficient," he said.

He said there are some important market failures in creative destruction which need to be focused on to bring in greater efficiency.on investment flow to India due to govt curbs: CEA

India Updates |

IBC still evolving, can be far more efficient: CEA

Chief Economist Adviser (CEA) Krishnamurthy Subramanian said on Wednesday that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is scope for the framework to become more efficient.

Speaking at a webinar on ‘Investment Opportunities in Stressed Assets in India’, organised by FICCI, Subramanian noted that the ecosystem of creative destruction is a very important part of any economy. He said the exit process for businesses was not enabled well in India before the IBC.

He added that there are some market failures in India in the “creative destruction” process.

“The IBC is an evolving process and there’s still scope for making it far more efficient,” he said.

Stressed assets are important components of a market economy and focus on various stakeholders that enable a process of creative destruction is very crucial, Subramanian said.

The CEA was of the view that corporate India also needs to recognise and respect the equity contract.

Latest News Tripura |

CEA Subramanian says 'creative destruction' crucial for Indian economy, IBC has scope for improvement

Chief Economic Adviser K V Subramanian today said that stressed assets are important components of a market economy and it is crucial to focus on various stakeholders that enable a process of creative destruction. K V Subramanian added that the ecosystem of creative destruction is a very important part of any economy as if we look at the Indian economy before IBC, the exit process wasn’t enabled well. It is to be noted that creative destruction means getting over the long-standing practices in order to make way for innovation, which is often seen as a driving force of capitalism.

Speaking at a FICCI webinar on ‘Investment Opportunities in Stressed Assets in India’, K V Subramanian further said that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is still scope for making it far more efficient. He underlined that corporate India needs to recognize and respect the equity contract.

The Insolvency and Bankruptcy Code 2016 is a landmark law that has contributed to ensuring the ease of doing business in India. However, the cases of liquidation are rising faster than those which are resolved. “The main reason for same is that most of the corporate debtors under CIRP are those where there are no assets or lucrative business for which a Resolution Applicant can bid for,” Daizy Chawla, Senior Partner, Singh & Associates, had told Financial Express Online in an interview. She had added that a corporate debtor may go into CIRP proceedings and there are chances that they receive a haircut to the tune of 90 per cent, which is one of the reasons why not every financial institution or operational creditor prefer I&B Code

“Over 13,000 insolvency cases have been filed of which just under 4,000 have been admitted. So, there’s a large backlog of cases to be admitted,” Nikhil Shah, MD, Alvarez & Marsal said in the same webinar. Past President of FICCI and Chairman & CEO of Edelweiss Group Rashesh Shah said that there are actually a lot of investment solutions which convert the NPAs or stressed assets into very high-performing assets.

Meanwhile, the government has taken proactive steps to fight stressed assets, in an effort the check the rising NPAs of banks. India has been taking progressive steps to facilitate investments into various stressed asset segments, said Pavan Kapoor, Ambassador of India to UAE at the FICCI webinar.

TFI Post |

IBC still evolving, can be far more efficient: CEA

Chief Economist Adviser (CEA) Krishnamurthy Subramanian said on Wednesday that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is scope for the framework to become more efficient.

Speaking at a webinar on ‘Investment Opportunities in Stressed Assets in India’, organised by FICCI, Subramanian noted that the ecosystem of creative destruction is a very important part of any economy. He said the exit process for businesses was not enabled well in India before the IBC.

He added that there are some market failures in India in the “creative destruction” process.

“The IBC is an evolving process and there’s still scope for making it far more efficient,” he said.

Stressed assets are important components of a market economy and focus on various stakeholders that enable a process of creative destruction is very crucial, Subramanian said.

The CEA was of the view that corporate India also needs to recognise and respect the equity contract

IND News |

IBC still evolving, can be far more efficient: CEA

Chief Economist Adviser (CEA) Krishnamurthy Subramanian said on Wednesday that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is scope for the framework to become more efficient.

Speaking at a webinar on ‘Investment Opportunities in Stressed Assets in India’, organised by FICCI, Subramanian noted that the ecosystem of creative destruction is a very important part of any economy. He said the exit process for businesses was not enabled well in India before the IBC.

He added that there are some market failures in India in the “creative destruction” process.

“The IBC is an evolving process and there’s still scope for making it far more efficient,” he said.

Stressed assets are important components of a market economy and focus on various stakeholders that enable a process of creative destruction is very crucial, Subramanian said.

The CEA was of the view that corporate India also needs to recognise and respect the equity contract.

sify.com |

Bankruptcy code can better, CEA reveals

Chief Economist Adviser (CEA) Krishnamurthy Subramanian said on Wednesday that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is scope for the framework to become more efficient.

Speaking at a webinar on 'Investment Opportunities in Stressed Assets in India', organised by FICCI, Subramanian noted that the ecosystem of creative destruction is a very important part of any economy. He said the exit process for businesses was not enabled well in India before the IBC.

He added that there are some market failures in India in the "creative destruction" process.

"The IBC is an evolving process and there's still scope for making it far more efficient," he said.

Stressed assets are important components of a market economy and focus on various stakeholders that enable a process of creative destruction is very crucial, Subramanian said.

The CEA was of the view that corporate India also needs to recognise and respect the equity contract.

Digi World Blog |

Stressed Assets market can flourish with incentives and price discovery: CEA Subramanian

Chief Economic Adviser Okay Subramanian on Wednesday mentioned that incentives and a market to find the worth of distressed property maintain the important thing for the stressed assets market to flourish in India.

Subramanian mentioned that the IBC course of is unquestionably an necessary step in the best path, however a couple of extra points must be taken care of.

One of these is the incentives that banks have, particularly the PSU banks, he mentioned.

“It is because those who work in the stressed asset market clearly understand that when a company goes into the stress, judgement is clearly involved. The company typically suffers from debt overhang and the fact that new investment by the equity holder may go to debt holders, makes equity holders not make the investment. This leads to the underinvestment problem,” he mentioned at a FICCI webinar on ‘Investment Opportunities in Stressed Assets in India’.

In such negotiations, Subramanian mentioned, the face worth of the debt is diminished, which allows some pores and skin within the recreation.

“What evolves then is a significant amount of judgement, the ability to price the value of loan with a necessary haircut. It involves taking a hit on P&L statement. There is always a possibility of hindsight bias, which can create enormous risk aversion. If a decision is read as a possible mala fide intent, that can also make bankers skittish in being able to take that judgement,” he mentioned.

“But such judgements are very important for the distress market because the loan has to be sold at a necessary hair cut. Given the risk involved in any distressed situation, a potential investor would want a return that would be commensurate to the substantial risk that is involved,” he mentioned.

Another facet Subramanian recommended is the necessity for a marketplace for worth discovery of the burdened property as with out that “the process of taking the hair cut itself becomes difficult.”

Distressed funds play an necessary function in such circumstances, Subramanian mentioned, so do company bond markets.

India’s burdened property market is estimated at $115 billion.

Subramanian mentioned the IBC is an evolving course of and there’s scope for making it extra environment friendly. “The ecosystem of creative destruction is a very important part of any economy. If we look at the Indian economy before IBC, while we had entry, the exit process was not enabled well. As a result the credit culture that prevailed earlier was far from salutary,” he mentioned.

Rashesh Shah, previous President, FICCI and Chairman & CEO at Edelweiss Group, mentioned that India is a superb funding alternative. Even as there’s a velocity bump, the expansion story on a long-term remains to be underway for the almost $3 trillion economic system, he mentioned.

“A lot of opportunities in India come from savings, consumptions and also from investments. I don’t call assets ‘stressed’. Assets are not stressed in India, it is the promoters and balance sheets that are stressed. Since IBC came in, a lot of assets found new owners and those assets did very well,” Shah mentioned.

Shah mentioned that alternatives don’t lie in recoveries however in revival and the IBC code in India can be targeted on that.

“Often this revival does not need a new management, operating capability or an overhaul in strategy. It just needs a new capital structure and investments. A lot of projects are stuck at 80-90 per cent in real estate or manufacturing, which require last mile funding. There are a lot of investment solutions to convert these stressed assets to high performing assets. There are tremendous opportunities for investors. All they require is patience and a flexible long term capital,” Shah mentioned.

Pavan Kapoor, Ambassador of India to UAE, mentioned that various of UAE sovereign funds are invested in numerous sectors in India as highways, building, inexpensive housing, telecom, and ports and logistics.

“The government has been making progressive steps to facilitate further investments in stress segments such as infra, construction mining, metals, and gems and jewellery,” Kapoor mentioned, including that India has emerged as the very best performing nation in South Asia in dealing with insolvency in the previous couple of years and carried out higher than many high-income nations by way of restoration charges.

Jhalak |

IBC still evolving, can be far more efficient: CEA

Chief Economist Adviser (CEA) Krishnamurthy Subramanian said on Wednesday that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is scope for the framework to become more efficient.

Speaking at a webinar on 'Investment Opportunities in Stressed Assets in India', organised by FICCI, Subramanian noted that the ecosystem of creative destruction is a very important part of any economy. He said the exit process for businesses was not enabled well in India before the IBC.

He added that there are some market failures in India in the "creative destruction" process.

"The IBC is an evolving process and there's still scope for making it far more efficient," he said.

Stressed assets are important components of a market economy and focus on various stakeholders that enable a process of creative destruction is very crucial, Subramanian said.

The CEA was of the view that corporate India also needs to recognise and respect the equity contract.

Ommcom News |

IBC still evolving, can be far more efficient: CEA

Chief Economist Adviser (CEA) Krishnamurthy Subramanian said on Wednesday that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is scope for the framework to become more efficient.

Speaking at a webinar on ‘Investment Opportunities in Stressed Assets in India’, organised by FICCI, Subramanian noted that the ecosystem of creative destruction is a very important part of any economy. He said the exit process for businesses was not enabled well in India before the IBC.

He added that there are some market failures in India in the “creative destruction” process.

“The IBC is an evolving process and there’s still scope for making it far more efficient,” he said.

Stressed assets are important components of a market economy and focus on various stakeholders that enable a process of creative destruction is very crucial, Subramanian said.

The CEA was of the view that corporate India also needs to recognise and respect the equity contract.

The Siasat Daily |

IBC still evolving, can be far more efficient: CEA

Chief Economist Adviser (CEA) Krishnamurthy Subramanian said on Wednesday that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is scope for the framework to become more efficient.

Speaking at a webinar on ‘Investment Opportunities in Stressed Assets in India’, organised by FICCI, Subramanian noted that the ecosystem of creative destruction is a very important part of any economy. He said the exit process for businesses was not enabled well in India before the IBC.

He added that there are some market failures in India in the “creative destruction” process.

“The IBC is an evolving process and there’s still scope for making it far more efficient,” he said.

Stressed assets are important components of a market economy and focus on various stakeholders that enable a process of creative destruction is very crucial, Subramanian said.

The CEA was of the view that corporate India also needs to recognise and respect the equity contract.

Live Mint |

Temporary impact on investment flow to India due to govt curbs: CEA Subramanian

There will be a temporary impact on investment flow to start-ups due to the curbs imposed by the government to stop opportunistic takeover by firms from countries with which India has border tensions, chief economic adviser KV Subramanian said on Wednesday.

According to a Press Note 3 issued by the Department for Promotion of Industry and Internal Trade (DPIIT) in April, a company or an individual from a country that shares land border with India can invest in any sector here only after getting government approval.

The decision has bearing on foreign investments from countries like China and Hong Kong.

Speaking at a virtual event organized by FICCI, Subramanian said investment, both direct and indirect, coming from countries, especially with which India has border tensions, needs to be scrutinised.

As a result, he said, "There will be some impact on start-up funding in the short run, but I do think that space will get filled by a large number of private equity (PE) companies from other countries."

He was replying to a question on if Press Note 3 will have any impact on investment flow from Hong Kong.

PE firms from other countries are interested in participating in the start-up ecosystem, he said, adding that "I expect this impact to be temporary".

India received FDI worth USD 2.34 billion ( ₹14,846 crore) from China between April 2000 and December 2019.

Speaking on insolvency and bankruptcy process, Subramanian said the ecosystem of creative destruction is important for any economy.

"IBC (Insolvency and Bankruptcy Code) process is an evolving process and there is still scope for making it more efficient," he said.

He said there are some important market failures in creative destruction which need to be focused on to bring in greater efficiency.

Live Mint |

Bankruptcy framework needs to be made more efficient for developing stressed asset market: CEA

India’s bankruptcy ecosystem needs to be made more efficient to develop the market for stressed assets in the post-pandemic era, chief economic advisor Krishnamurthy Subramanian said here.

The bankruptcy framework can be improved by enabling bankers to take economically efficient decisions, which entail assessing the fair value of sinking firms with the necessary haircut, Subramanian said at a webinar on "investment opportunities in stressed assets" organised by Federation of Indian Chambers of Commerce and Industry (FICCI).

Subramanian’s suggestion is particularly relevant for public sector banks, in which individual executives may shy away from timely and bold decisions about the worth of an asset fearing an enquiry into the wisdom of it at a later date by regulatory or investigating agencies.

Subramanian also said that corporate India needs to recognise that ceding control of failing firms may be an inevitable part of equity contract. One of the major areas of litigation which delays resolution of bankruptcy cases is the reluctance of major shareholders in ceding control. The bankruptcy code allows majority lenders to take critical decisions about the company including adoption of resolution plans or to liquidate the company.

Subramanian said that the ecosystem should take care of the distress that will invariably settle in businesses due to the pandemic as is the case everywhere in the world.

Debt re-negotiation where the face value of the debt is reduced can help in bringing new investment but that involves exercising significant amount of judgement by bankers, Subramanian explained. “The ability to arrive at a fair value of the loan with necessary haircut involves significant judgment," he said, adding that analysing such decisions without appreciating its nuances and with a hindsight bias could lead to enormous risk aversion and can make it very difficult for bankers to do what is economically efficient. Exercising such judgement is important for the stressed asset market, he said.

“The eco-system of creative destruction is a very important part of any economy," he said, adding that establishing a market for price discovery of stressed assets was also important.

According to Nikhil Shah, managing director of Alvarez & Marsal India, a management consultancy, the size of the stressed asset investment opportunity in India was ₹200 billion prior to the covid pandemic.

Sudhakar Shukla, whole time director of Insolvency and Bankruptcy Board of India (IBBI), the bankruptcy rule maker, who was also present at the webinar, said a panel led by IBBI chairperson M.S. Sahoo will submit a report to the government on ‘pre-packaged bankruptcy resolution schemes’ within a week. The government will then decide on the rollout model, he said. Pre-packaged resolution schemes offer a quick corporate rescue option, which will be finalized mostly in boardrooms than in courts to save time and to avoid legal battles. Under this, creditors and shareholders can approach a bankruptcy court with a pre-negotiated corporate reorganization plan as is prevalent in countries such as the US and the UK.

Shukla said that the Bankruptcy Code is a potent tool which has helped in resolving 270 cases involving $30 billion in capital. Also, more than 50,000 cases with a total value of around $90 billion worth of capital under stress have been withdrawn from bankruptcy proceedings, he said. This indicates out of court settlement.

The Hindu |

Allow trading in bonds from stressed businesses: CEA Krishnamurthy Subramanian

Vital for price discovery, says CEA

Regulators must consider permitting the trading of bonds issued by distressed businesses in the corporate bond market, mooted Chief Economic Advisor (CEA) Krishnamurthy Subramanian, adding that with the COVID-19 pandemic set to ‘inevitably’ add to the distress in corporates’ and lenders’ balance-sheets, the country needed a price discovery mechanism for stressed assets.

Asserting that the country’s evolving insolvency and bankruptcy process still had scope to become more efficient, he said, “We also need a market for price discovery of stressed assets, without which the process of taking a haircut becomes difficult”.

“Similarly, a corporate bond market that enables bonds of distressed companies to be traded becomes important.

“In India, it’s primarily just the [firms with] top few ratings that get traded. The U.S. benefits a lot in the creative destruction process by having that market for price discovery. So, we need to look at our incentives and the market for price discovery,” Mr. Subramanian added.

‘Incentive problem’

Investigations against bankers for judgments they may exercise to resolve stressed loan accounts also cramped their ability to take ‘economically efficient’ decisions, he opined. Flagging an ‘incentive’ problem affecting public sector bankers in particular, he said that judgment is involved when a company goes into distress and its debt needs to be restructured or written down to turn it around or attract other investors.

“A significant amount of judgment is used to price the value of that debt with a necessary haircut [and] take that hit in the profit and loss account... This is where because of the involvement of judgment, there is always this possibility of a hindsight bias that can create enormous risk aversion,” Mr. Subramanian said. “If a decision made after exercising judgment, can be viewed with a malafide intent, that can make bankers very skittish in making those judgments,” he added.

“Investigations that do not take into account some of these very important nuances, really make it very difficult for bankers to do what is economically efficient,” the CEA said, stressing that such judgment was critical for alleviating the distressed assets problem.

Business barons also needed to snap out of a ‘Heads I win, tails you lose’ approach, Mr. Subramanian contended at a session on stressed assets hosted by industry body FICCI.

“Corporate India needs to recognise and respect that the equity contract entails — if things go well, even if due to luck, you retain control; but if things go bad, possibly also due to luck or exogenous circumstances, ceding control is part of the equity contract,” he said.

CNBC TV18 |

Chief economic advisor Subramanian bats for more reforms in the bankruptcy law

India's four-year-old Insolvency and Bankruptcy Code (IBC), which has been amended five times since its inception, has scope for further improvements, chief economic advisor (CEA) Krishnamurthy Subramanian on Wednesday said.

Speaking at a FICCI seminar on stressed assets, Subramanian said that while India was already seeing stress build-up before the pandemic hit, there was bound to be some stress that will be added due to COVID-19.

Reserve Bank of India (RBI) estimates that gross bad loans may rise from 8.5 percent in March 2020 to anywhere between 12.5-14.7 percent by March 2021 due to COVID-19 induced stress.

"Given the stress that had built up in the financial sector before we entered the crisis, we will now have to take care of some stress that will inevitably happen because of COVID-19. The eco-system of creative destruction is a very important part of any economy," he said.

Subramanian noted that while IBC is a step in the right direction, "there is scope for making it far more efficient."

To ensure a more flourishing market for distressed assets market, Subramanian said there was a need to focus on incentives for banks, especially public sector banks, along with establishing a market for price discovery of stressed assets.

"With the involvement of judgement, there is always a possibility of hindsight bias which can create enormous risk aversion. Judgement and investigation that does not take into account some of these nuances can make it difficult for the bankers to do what is economically efficient," he added.

Speaking about reforms in the insolvency code during the same event, Sudhaker Shukla, whole-time member, Insolvency and Bankruptcy Board of India (IBBI) said they the board was developing a platform for stressed assets, which would eventually have an auction platform as well. Shukla said investors can easily find all information about the investment potential through this platform. "The virtual data room has been launched on October 1 and the auction facility will be available in another six months," he said.

Shukla claimed that recoveries under IBC had improved from 26 cents to a dollar to 71 cents to a dollar and the average time taken for resolution under the code had come down from 4.5-3 years to 1.6 years over the past three years.

Business Today |

Pre-packs insolvency resolution: MS Sahoo panel to submit report in a week

The committee set up under MS Sahoo, chairperson of the Insolvency and Bankruptcy Board of India (IBBI), for framing laws for pre-packaged (pre-packs) insolvency resolution will submit its report in a week, whole-time member of IBBI Sudhaker Shukla said in an event organised by FICCI today.

Pre-packs are a hybrid between court-supervised insolvency resolution process and out-of-court settlement. Pre-packs are popular in many countries as an alternative to lengthy insolvency processes as they are faster, cheaper and are done with statutory sanctioning. With National Company Law Tribunal (NCLT) clogged by insolvency cases - around 13,000 cases have been filed so far - the government has been looking at an alternative mechanism for resolution outside the framework of Insolvency and Bankruptcy Code (IBC).

In a recently published report, IBBI chairperson acknowledged that "the market has been advocating and anticipating a resolution framework which is a hybrid between the court supervised insolvency framework and out-of-court restructuring schemes that harnesses the best of both the worlds sans their demerits and provides a formal framework for resolutions that are happening today in the shadow or on account of the Code."

He had observed in that report that most pre-packs across the globe start with an informal understanding, engage the stakeholders in between, and end with a judicial blessing of its outcome, though the nuances differ from one jurisdiction to another.

"Sometimes even within a jurisdiction, there may exist more than one variant of a pre-pack. The government has constituted a sub-committee of the Insolvency Law Committee recently to recommend the regulatory framework for pre-pack insolvency resolution process. Likely, this would, require an amendment to the Code," he had said.

Meanwhile, Shudaker Shukla also informed that the IBBI has launched an IT platform -- Platforms for Distressed Assets (PDAs) - for insolvency professionals to seek interim finance, invite resolution plans. The platform will offer virtual data room facility for information dissemination on need to know basis so that interested investors and bidders can access all the information about the corporate debtor whether in the resolution period or at the time of liquidation.

The platform will also have the option of auctioning stressed assets, but that functionality will be available after six months.

News18 |

Temporary impact on investment flow to India due to govt curbs: CEA

There will be a temporary impact on investment flow to start-ups due to the curbs imposed by the government to stop opportunistic takeover by firms from countries with which India has border tensions, Chief Economic Adviser K V Subramanian said on Wednesday. According to a Press Note 3 issued by the Department for Promotion of Industry and Internal Trade (DPIIT) in April, a company or an individual from a country that shares land border with India can invest in any sector here only after getting government approval.

The decision has bearing on foreign investments from countries like China and Hong Kong. Speaking at a virtual event organized by FICCI, Subramanian said investment, both direct and indirect, coming from countries, especially with which India has border tensions, needs to be scrutinised.

As a result, he said, "There will be some impact on start-up funding in the short run, but I do think that space will get filled by a large number of private equity (PE) companies from other countries." He was replying to a question on if Press Note 3 will have any impact on investment flow from Hong Kong. PE firms from other countries are interested in participating in the start-up ecosystem, he said, adding that "I expect this impact to be temporary".

India received FDI worth USD 2.34 billion (Rs 14,846 crore) from China between April 2000 and December 2019. Speaking on insolvency and bankruptcy process, Subramanian said the ecosystem of creative destruction is important for any economy.

"IBC (Insolvency and Bankruptcy Code) process is an evolving process and there is still scope for making it more efficient,"he said. He said there are some important market failures in creative destruction which need to be focused on to bring in greater efficiency.

Money Control |

Temporary impact on investment flow to India due to govt curbs: CEA K V Subramanian

There will be a temporary impact on investment flow to start-ups due to the curbs imposed by the government to stop opportunistic takeover by firms from countries with which India has border tensions, Chief Economic Adviser K V Subramanian said on October 14.

According to a Press Note 3 issued by the Department for Promotion of Industry and Internal Trade (DPIIT) in April, a company or an individual from a country that shares land border with India can invest in any sector here only after getting government approval. The decision has bearing on foreign investments from countries like China and Hong Kong.

Speaking at a virtual event organized by FICCI, Subramanian said investment, both direct and indirect, coming from countries, especially with which India has border tensions, needs to be scrutinised. As a result, he said, "There will be some impact on start-up funding in the short run, but I do think that space will get filled by a large number of private equity (PE) companies from other countries."

He was replying to a question on if Press Note 3 will have any impact on investment flow from Hong Kong. PE firms from other countries are interested in participating in the start-up ecosystem, he said, adding that "I expect this impact to be temporary".

India received FDI worth USD 2.34 billion (Rs 14,846 crore) from China between April 2000 and December 2019. Speaking on insolvency and bankruptcy process, Subramanian said the ecosystem of creative destruction is important for any economy.

"IBC (Insolvency and Bankruptcy Code) process is an evolving process and there is still scope for making it more efficient," he said. He said there are some important market failures in creative destruction which need to be focused on to bring in greater efficiency.

Daiji World |

IBC still evolving, can be far more efficient: CEA

Chief Economist Adviser (CEA) Krishnamurthy Subramanian said on Wednesday that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is scope for the framework to become more efficient.

Speaking at a webinar on 'Investment Opportunities in Stressed Assets in India', organised by FICCI, Subramanian noted that the ecosystem of creative destruction is a very important part of any economy. He said the exit process for businesses was not enabled well in India before the IBC.

He added that there are some market failures in India in the "creative destruction" process.

"The IBC is an evolving process and there's still scope for making it far more efficient," he said.

Stressed assets are important components of a market economy and focus on various stakeholders that enable a process of creative destruction is very crucial, Subramanian said.

The CEA was of the view that corporate India also needs to recognise and respect the equity contract.

DT Next |

IBC still evolving, can be far more efficient: CEA

Chief Economist Adviser (CEA) Krishnamurthy Subramanian said on Wednesday that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is scope for the framework to become more efficient.

Speaking at a webinar on 'Investment Opportunities in Stressed Assets in India', organised by FICCI, Subramanian noted that the ecosystem of creative destruction is a very important part of any economy. He said the exit process for businesses was not enabled well in India before the IBC.

He added that there are some market failures in India in the "creative destruction" process.

"The IBC is an evolving process and there's still scope for making it far more efficient," he said.

Stressed assets are important components of a market economy and focus on various stakeholders that enable a process of creative destruction is very crucial, Subramanian said.

The CEA was of the view that corporate India also needs to recognise and respect the equity contract.

Finance Khabar |

IBC still evolving, can be far more efficient: CEA

Chief Economist Adviser (CEA) Krishnamurthy Subramanian said on Wednesday that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is scope for the framework to become more efficient.

Speaking at a webinar on ‘Investment Opportunities in Stressed Assets in India’, organised by FICCI, Subramanian noted that the ecosystem of creative destruction is a very important part of any economy. He said the exit process for businesses was not enabled well in India before the IBC.

He added that there are some market failures in India in the “creative destruction” process.

“The IBC is an evolving process and there’s still scope for making it far more efficient,” he said.

Stressed assets are important components of a market economy and focus on various stakeholders that enable a process of creative destruction is very crucial, Subramanian said.

V Media Network |

CEA Subramanian says 'creative destruction' crucial for Indian economy, IBC has scope for improvement

Chief Economic Adviser K V Subramanian today said that stressed assets are important components of a market economy and it is crucial to focus on various stakeholders that enable a process of creative destruction. K V Subramanian added that the ecosystem of creative destruction is a very important part of any economy as if we look at the Indian economy before IBC, the exit process wasn’t enabled well. It is to be noted that creative destruction means getting over the long-standing practices in order to make way for innovation, which is often seen as a driving force of capitalism.

Speaking at a FICCI webinar on ‘Investment Opportunities in Stressed Assets in India’, K V Subramanian further said that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is still scope for making it far more efficient. He underlined that corporate India needs to recognize and respect the equity contract.

The Insolvency and Bankruptcy Code 2016 is a landmark law that has contributed to ensuring the ease of doing business in India. However, the cases of liquidation are rising faster than those which are resolved. “The main reason for same is that most of the corporate debtors under CIRP are those where there are no assets or lucrative business for which a Resolution Applicant can bid for,” Daizy Chawla, Senior Partner, Singh & Associates, had told Financial Express Online in an interview. She had added that a corporate debtor may go into CIRP proceedings and there are chances that they receive a haircut to the tune of 90 per cent, which is one of the reasons why not every financial institution or operational creditor prefer I&B Code

“Over 13,000 insolvency cases have been filed of which just under 4,000 have been admitted. So, there’s a large backlog of cases to be admitted,” Nikhil Shah, MD, Alvarez & Marsal said in the same webinar. Past President of FICCI and Chairman & CEO of Edelweiss Group Rashesh Shah said that there are actually a lot of investment solutions which convert the NPAs or stressed assets into very high-performing assets.

Meanwhile, the government has taken proactive steps to fight stressed assets, in an effort the check the rising NPAs of banks. India has been taking progressive steps to facilitate investments into various stressed asset segments, said Pavan Kapoor, Ambassador of India to UAE at the FICCI webinar.

Aaj Ki Taaza News |

CEA Subramanian says 'creative destruction' essential for Indian economic system, IBC has scope for enchancment

Chief Economic Adviser K V Subramanian immediately stated that pressured belongings are necessary parts of a market economic system and it’s essential to concentrate on varied stakeholders that allow a means of inventive destruction. K V Subramanian added that the ecosystem of inventive destruction is an important a part of any economic system as if we have a look at the Indian economic system earlier than IBC, the exit course of wasn’t enabled properly. It is to be famous that inventive destruction means getting over the long-standing practices to be able to make approach for innovation, which is commonly seen as a driving power of capitalism.

Speaking at a FICCI webinar on ‘Investment Opportunities in Stressed Assets in India’, K V Subramanian additional stated that the Insolvency and Bankruptcy Code (IBC) is an evolving course of and there’s nonetheless scope for making it much more environment friendly. He underlined that company India wants to acknowledge and respect the fairness contract.

The Insolvency and Bankruptcy Code 2016 is a landmark regulation that has contributed to making sure the benefit of doing enterprise in India. However, the circumstances of liquidation are rising sooner than these that are resolved. “The main reason for same is that most of the corporate debtors under CIRP are those where there are no assets or lucrative business for which a Resolution Applicant can bid for,” Daizy Chawla, Senior Partner, Singh & Associates, had advised Financial Express Online in an interview. She had added {that a} company debtor could go into CIRP proceedings and there are probabilities that they obtain a haircut to the tune of 90 per cent, which is likely one of the explanation why not each monetary establishment or operational creditor choose I&B Code

“Over 13,000 insolvency cases have been filed of which just under 4,000 have been admitted. So, there’s a large backlog of cases to be admitted,” Nikhil Shah, MD, Alvarez & Marsal stated in the identical webinar. Past President of FICCI and Chairman & CEO of Edelweiss Group Rashesh Shah stated that there are literally a whole lot of funding options which convert the NPAs or pressured belongings into very high-performing belongings.

Meanwhile, the federal government has taken proactive steps to combat pressured belongings, in an effort the examine the rising NPAs of banks. India has been taking progressive steps to facilitate investments into varied pressured asset segments, stated Pavan Kapoor, Ambassador of India to UAE on the FICCI webinar.

News 4545 |

Temporary impact on investment flow to India due to govt curbs: CEA K V Subramanian

There will be a temporary impact on investment flow to start-ups due to the curbs imposed by the government to stop opportunistic takeover by firms from countries with which India has border tensions, Chief Economic Adviser K V Subramanian said on October 14.

According to a Press Note 3 issued by the Department for Promotion of Industry and Internal Trade (DPIIT) in April, a company or an individual from a country that shares land border with India can invest in any sector here only after getting government approval. The decision has bearing on foreign investments from countries like China and Hong Kong.

Speaking at a virtual event organized by FICCI, Subramanian said investment, both direct and indirect, coming from countries, especially with which India has border tensions, needs to be scrutinised. As a result, he said, “There will be some impact on start-up funding in the short run, but I do think that space will get filled by a large number of private equity (PE) companies from other countries.”

He was replying to a question on if Press Note 3 will have any impact on investment flow from Hong Kong. PE firms from other countries are interested in participating in the start-up ecosystem, he said, adding that “I expect this impact to be temporary”.

India received FDI worth USD 2.34 billion (Rs 14,846 crore) from China between April 2000 and December 2019. Speaking on insolvency and bankruptcy process, Subramanian said the ecosystem of creative destruction is important for any economy.

“IBC (Insolvency and Bankruptcy Code) process is an evolving process and there is still scope for making it more efficient,” he said. He said there are some important market failures in creative destruction which need to be focused on to bring in greater efficiency.

MSN News |

Insolvency 'pre-packs': A game changer to wind down bankrupt businesses

The committee set up under MS Sahoo, chairperson of the Insolvency and Bankruptcy Board of India (IBBI), for framing laws for pre-packaged (pre-packs) insolvency resolution will submit its report in a week, whole-time member of IBBI Sudhaker Shukla said in an event organised by FICCI today.

Pre-packs are a hybrid between court-supervised insolvency resolution process and out-of-court settlement. Pre-packs are popular in many countries as an alternative to lengthy insolvency processes as they are faster, cheaper and are done with statutory sanctioning. With National Company Law Tribunal (NCLT) clogged by insolvency cases - around 13,000 cases have been filed so far - the government has been looking at an alternative mechanism for resolution outside the framework of Insolvency and Bankruptcy Code (IBC).

In a recently published report, IBBI chairperson acknowledged that "the market has been advocating and anticipating a resolution framework which is a hybrid between the court supervised insolvency framework and out-of-court restructuring schemes that harnesses the best of both the worlds sans their demerits and provides a formal framework for resolutions that are happening today in the shadow or on account of the Code."

He had observed in that report that most pre-packs across the globe start with an informal understanding, engage the stakeholders in between, and end with a judicial blessing of its outcome, though the nuances differ from one jurisdiction to another.

"Sometimes even within a jurisdiction, there may exist more than one variant of a pre-pack. The government has constituted a sub-committee of the Insolvency Law Committee recently to recommend the regulatory framework for pre-pack insolvency resolution process. Likely, this would, require an amendment to the Code," he had said.

Meanwhile, Shudaker Shukla also informed that the IBBI has launched an IT platform -- Platforms for Distressed Assets (PDAs) - for insolvency professionals to seek interim finance, invite resolution plans. The platform will offer virtual data room facility for information dissemination on need to know basis so that interested investors and bidders can access all the information about the corporate debtor whether in the resolution period or at the time of liquidation.

The platform will also have the option of auctioning stressed assets, but that functionality will be available after six months.

Fresher Live |

IBC still evolving, can be far more efficient: CEA

Chief Economist Adviser (CEA) Krishnamurthy Subramanian said on Wednesday that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is scope for the framework to become more efficient.
Speaking at a webinar on 'Investment Opportunities in Stressed Assets in India', organised by FICCI, Subramanian noted that the ecosystem of creative destruction is a very important part of any economy. He said the exit process for businesses was not enabled well in India before the IBC.

He added that there are some market failures in India in the "creative destruction" process.

"The IBC is an evolving process and there's still scope for making it far more efficient," he said.

Stressed assets are important components of a market economy and focus on various stakeholders that enable a process of creative destruction is very crucial, Subramanian said.
The CEA was of the view that corporate India also needs to recognise and respect the equity contract.

Social News.xyz |

IBC still evolving, can be far more efficient: CEA

Chief Economist Adviser (CEA) Krishnamurthy Subramanian said on Wednesday that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is scope for the framework to become more efficient.

Speaking at a webinar on 'Investment Opportunities in Stressed Assets in India', organised by FICCI, Subramanian noted that the ecosystem of creative destruction is a very important part of any economy. He said the exit process for businesses was not enabled well in India before the IBC.

He added that there are some market failures in India in the "creative destruction" process.

"The IBC is an evolving process and there's still scope for making it far more efficient," he said.

Stressed assets are important components of a market economy and focus on various stakeholders that enable a process of creative destruction is very crucial, Subramanian said.

The CEA was of the view that corporate India also needs to recognise and respect the equity contract.

Andhram |

IBC still evolving, can be far more efficient: CEA

Chief Economist Adviser (CEA) Krishnamurthy Subramanian said on Wednesday that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is scope for the framework to become more efficient.

Speaking at a webinar on ‘Investment Opportunities in Stressed Assets in India’, organised by FICCI, Subramanian noted that the ecosystem of creative destruction is a very important part of any economy. He said the exit process for businesses was not enabled well in India before the IBC.

He added that there are some market failures in India in the “creative destruction” process.

“The IBC is an evolving process and there’s still scope for making it far more efficient,” he said.

Stressed assets are important components of a market economy and focus on various stakeholders that enable a process of creative destruction is very crucial, Subramanian said.

The CEA was of the view that corporate India also needs to recognise and respect the equity contract.

PSU Watch |

IBC is an evolving process and there is scope for making it more: CEA

While noting that IBC is an evolving process and there is scope for making it far more efficient, Chief Economic Adviser Dr Krishnamurthy Subramanian said that it is definitely an important step in the right direction. Addressing a virtual session ‘Investment Opportunities in Stressed Assets in India,’ organised by FICCI, Dr Subramanian said, “Given the stress that had built up in the financial sector before we entered the crisis, we will now have to take care of some stress that will inevitably happen because of COVID-19. The eco-system of creative destruction is a very important part of any economy.”
In order to make the distressed assets market to flourish in the Indian context, Dr Subramanian said that we need to focus on incentives for banks, especially public sector banks, along with establishing a market for price discovery of stressed assets.

A market for price discovery of stressed assets

He further highlighted that when a company goes into distress, judgment is involved in order to avoid the under-investment problem. “With the involvement of judgement, there is always a possibility of hindsight bias which can create enormous risk aversion. Judgement and investigation that does not take into account some of these nuances can make it difficult for the bankers to do what is economically efficient,” Dr Subramanian noted.
Emphasising the importance of establishing a market for price discovery of stressed assets, he said that without this, the process of taking the haircut itself becomes difficult. “This is where distressed funds play an important role. Also, the corporate bond market that enables the distressed companies, for the loans and bonds to be traded also becomes important.” Highlighting the US case of having a market for price discovery, he said that there are some important market failures which we have in the creative destruction process which we need to focus, added Dr Subramanian.

‘India can have a V-shaped recovery’

Sudhaker Shukla, Whole Time Member, Insolvency and Bankruptcy Board of India (IBBI), said that the economic analysis from emerging data shows that India can have V-shaped recovery. “One should be assured that we are at the right path of the recovery. There would be certain sectors which would be still under stress, hence there is a need for sectoral analysis to be done of those sectors,” he added.
Shukla also informed that the IBBI is developing a platform for stressed assets and eventually will have auction platform as well through which investors can easily find all information about the investment potential. “The virtual data room has been launched on 1st October and the auction facility will be available in another 6 months. I invite you (investors) to participate in the encouraging development story of India,” he added.

While highlighting the World Bank’s reports on Ease of Doing Business which mentions that the average time taken to resolve insolvency case in India has come down from 4.5-3 years to 1.6 years now. “All indicators suggest that India is the best performer in South Asia, and comparable in results emanating from the OECD countries,” Shukla emphasised.

Highlighting on the IBC process, he said that pre-IBC, the regime was scattered but now IBC has brought regulatory certainty along with time-bound processes. “All loopholes have been plugged in so this is a responsive regime. This is the reform by stakeholders, of the stakeholders and for the stakeholders,” he added.

newsd |

IBC still evolving, can be far more efficient: CEA

Chief Economist Adviser (CEA) Krishnamurthy Subramanian said on Wednesday that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is scope for the framework to become more efficient.

Speaking at a webinar on ‘Investment Opportunities in Stressed Assets in India’, organised by FICCI, Subramanian noted that the ecosystem of creative destruction is a very important part of any economy. He said the exit process for businesses was not enabled well in India before the IBC.

He added that there are some market failures in India in the “creative destruction” process.

“The IBC is an evolving process and there’s still scope for making it far more efficient,” he said.

Stressed assets are important components of a market economy and focus on various stakeholders that enable a process of creative destruction is very crucial, Subramanian said.

The CEA was of the view that corporate India also needs to recognise and respect the equity contract.

The Economic Times |

Stressed assets market can flourish with incentives and price discovery: CEA Subramanian

Chief Economic Adviser K Subramanian on Wednesday said that incentives and a market to discover the price of distressed assets hold the key for the stressed assets market to flourish in India.

Subramanian said that the IBC process is definitely an important step in the right direction, but a few more aspects need to be taken care of.

One of those is the incentives that banks have, especially the PSU banks, he said.

"It is because those who work in the stressed asset market clearly understand that when a company goes into the stress, judgement is clearly involved. The company typically suffers from debt overhang and the fact that new investment by the equity holder may go to debt holders, makes equity holders not make the investment. This leads to the underinvestment problem," he said at a FICCI webinar on 'Investment Opportunities in Stressed Assets in India'.

In such negotiations, Subramanian said, the face value of the debt is reduced, which enables some skin in the game.

"What evolves then is a significant amount of judgement, the ability to price the value of loan with a necessary haircut. It involves taking a hit on P&L statement. There is always a possibility of hindsight bias, which can create enormous risk aversion. If a decision is read as a possible mala fide intent, that can also make bankers skittish in being able to take that judgement," he said.

"But such judgements are very important for the distress market because the loan has to be sold at a necessary hair cut. Given the risk involved in any distressed situation, a potential investor would want a return that would be commensurate to the substantial risk that is involved," he said.

Another aspect Subramanian suggested is the need for a market for price discovery of the stressed assets as without that "the process of taking the hair cut itself becomes difficult."

Distressed funds play an important role in such cases, Subramanian said, so do corporate bond markets.

India's stressed assets market is estimated at $115 billion.

Subramanian said the IBC is an evolving process and there is scope for making it more efficient. "The ecosystem of creative destruction is a very important part of any economy. If we look at the Indian economy before IBC, while we had entry, the exit process was not enabled well. As a result the credit culture that prevailed earlier was far from salutary," he said.

Rashesh Shah, past President, FICCI and Chairman & CEO at Edelweiss Group, said that India is a great investment opportunity. Even as there is a speed bump, the growth story on a long-term is still underway for the nearly $3 trillion economy, he said.

"A lot of opportunities in India come from savings, consumptions and also from investments. I don't call assets 'stressed'. Assets are not stressed in India, it is the promoters and balance sheets that are stressed. Since IBC came in, a lot of assets found new owners and those assets did very well," Shah said.

Shah said that opportunities do not lie in recoveries but in revival and the IBC code in India is also focused on that.

"Often this revival does not need a new management, operating capability or an overhaul in strategy. It just needs a new capital structure and investments. A lot of projects are stuck at 80-90 per cent in real estate or manufacturing, which require last mile funding. There are a lot of investment solutions to convert these stressed assets to high performing assets. There are tremendous opportunities for investors. All they require is patience and a flexible long term capital," Shah said.

Pavan Kapoor, Ambassador of India to UAE, said that a number of of UAE sovereign funds are invested in diverse sectors in India as highways, construction, affordable housing, telecom, and ports and logistics.

"The government has been making progressive steps to facilitate further investments in stress segments such as infra, construction mining, metals, and gems and jewellery," Kapoor said, adding that India has emerged as the best performing country in South Asia in handling insolvency in the last few years and performed better than many high-income countries in terms of recovery rates.

Financial Express |

CEA Subramanian says 'creative destruction' crucial for Indian economy, IBC has scope for improvement

Chief Economic Adviser K V Subramanian today said that stressed assets are important components of a market economy and it is crucial to focus on various stakeholders that enable a process of creative destruction. K V Subramanian added that the ecosystem of creative destruction is a very important part of any economy as if we look at the Indian economy before IBC, the exit process wasn’t enabled well. It is to be noted that creative destruction means getting over the long-standing practices in order to make way for innovation, which is often seen as a driving force of capitalism.

Speaking at a FICCI webinar on ‘Investment Opportunities in Stressed Assets in India’, K V Subramanian further said that the Insolvency and Bankruptcy Code (IBC) is an evolving process and there is still scope for making it far more efficient. He underlined that corporate India needs to recognize and respect the equity contract.

The Insolvency and Bankruptcy Code 2016 is a landmark law that has contributed to ensuring the ease of doing business in India. However, the cases of liquidation are rising faster than those which are resolved. “The main reason for same is that most of the corporate debtors under CIRP are those where there are no assets or lucrative business for which a Resolution Applicant can bid for,” Daizy Chawla, Senior Partner, Singh & Associates, had told Financial Express Online in an interview. She had added that a corporate debtor may go into CIRP proceedings and there are chances that they receive a haircut to the tune of 90 per cent, which is one of the reasons why not every financial institution or operational creditor prefer I&B Code

“Over 13,000 insolvency cases have been filed of which just under 4,000 have been admitted. So, there’s a large backlog of cases to be admitted,” Nikhil Shah, MD, Alvarez & Marsal said in the same webinar. Past President of FICCI and Chairman & CEO of Edelweiss Group Rashesh Shah said that there are actually a lot of investment solutions which convert the NPAs or stressed assets into very high-performing assets.

Meanwhile, the government has taken proactive steps to fight stressed assets, in an effort the check the rising NPAs of banks. India has been taking progressive steps to facilitate investments into various stressed asset segments, said Pavan Kapoor, Ambassador of India to UAE at the FICCI webinar.

The Economic Times |

SBI has distressed assets worth Rs 1.5 lakh crore: Rajnish Kumar

The State Bank of India NSE -1.46 % (SBI) has about Rs 1.5 lakh crore in distressed assets, according to Rajnish Kumar, chairman and managing director of the public lender.

"We have the dubious distinction of having the largest distressed assets portfolio in the country but not in terms of the percentage of our loan portfolio,” Kumar said during a Federation of Indian Chambers of Commerce and Industry conference on Thursday.

While initiation of fresh insolvency proceedings under the Insolvency and Bankruptcy Code (IBC) had been suspended for six months, Kumar said banks always had the Reserve Bank of India’s (RBI) June 7 circular on stressed asset resolution framework to fall back on.

“That should not matter because in any case, the resolution framework of RBI gives a window of about six months to arrive at a resolution framework and only if lenders do not succeed in that period, they have the choice to take the borrower through the legal process of DRT (Debt Recovery Tribunal) or NCLT (National Company Law Tribunal)," Kumar said

On June 5, the government promulgated an ordinance suspending sections 7, 9 and 10 of the IBC for six months from March 25, extendable by up to a year, in order to protect companies from being dragged to the bankruptcy court for defaults on account of the pandemic.

The government is currently trying to pass the provisions of the ordinance through an amendment bill in Parliament.

Speaking on the theme of the conference, ‘Opportunities for Investment in Stressed Assets in India’, Kumar said there were various estimates of the opportunities in stressed assets in the country but it was not as large as it was being made out to be which was a good thing for the economy.

“From the analysis of my own loan book, I feel that the opportunity may not be as large as it is being made out to be. That would be a happy situation for the country and all of us should wish that this opportunity remains small," said Kumar.

Financial Express |

Opportunities in stressed assets may not be as large as it has been made out to be: SBI chairman

State Bank of India (SBI) chairman Rajnish Kumar does not expect stress on assets to be as high as it has been projected. As a result, the opportunities for investors in stressed assets may not be as large as it has been made out to be. Kumar said this while speaking at a conference on opportunities for investment in stressed assets in India organised by industry body FICCI.

Rajnish Kumar said various estimates were going around on the amount of stress that could emerge in the aftermath of Covid-19. However, he said, “At SBI, I have a little contrarian view, and I do not want to disappoint potential investors.” Analysis of SBI’s loan book shows that the opportunity may not be as large as it has been made out to be. “And that would be a happy situation for country as well that opportunity remains small and not large,” he added.

FE had earlier reported that SBI expects 5% of its outstanding loans to come up for restructuring even though 72% of corporate loans in the system are under stress. The Reserve Bank of India (RBI) had earlier allowed restructuring of personal and corporate loans with strict boundaries.

Rajnish Kumar said there was complete clarity on restructuring of corporate loans due to recommendations of Kamath committee. The central bank had earlier accepted recommendations made by a committee under KV Kamath for restructuring of corporate loans. The central bank specified five key ratios across 26 sectors, which lenders must follow while restructuring of corporate accounts impacted by Covid-19. Kumar also said that SBI has set up category 1 real estate fund to look at the opportunities in the sector.

Business Standard |

SBI open to global partnership for resolution of stressed assets: Chairman

State Bank of India (SBI) will work with global investors to put funds into distressed corporate assets in country.

The largest lender in the country can partner with international investors interested in investing in distressed assets, its Chairman Rajnish Kumar said, addressing webinar.

Besides, SBICAP Ventures, a subsidiary, can support and forge alliances for such opportunities. It is already managing a government-backed fund for completing stalled residential real estate projects. The bank is in dialogue with potential investors but no there is specific plan before us, Kumar said.

The debt recast is applicable for Covid-impacted companies and those that were facing stress before the pandemic spread.

According to rating agency ICRA, the total amount of the debt that could be restructured is between Rs 6 trillion and Rs 10 trillion. Banks have an asset book of Rs 100 trillion and another Rs 35 trillion is from non-bank lenders.

While estimates about debt restructuring could vary, distressed asset opportunities are not as large as is projected, Kumar said.

The estimate of the amount of portfolio to be restructured is based on an assumption that the overall assets under moratorium came down to 20-25 per cent by the close of the six-month relief in August, ICRA said.

The Indian Express |

Bankers pitch stressed domestic assets to foreign investors

Indian lenders are marketing domestic stressed assets to foreign investors noting that the current economic scenario would offer “fantastic valuations” to potential foreign investors besides access to a dedicated workforce and a large domestic market.

At a conference organised by FICCI, SBI Chairman Rajnish Kumar said while the number of distressed assets in India may not be as large as many expect, it was still a significant market that foreign investors should take note of. He said SBI would be willing to join hands with potential investors acting as their local partners.

Sunil Mehta, CEO, Indian Banks’ Association, said the market for distressed assets in India offered a very good investment proposition with assets available at low valuations.

Live Mint |

Lenders have RBI's 7 June circular to resolve stress in the absence of IBC: Rajnish Kumar

Although new cases under India’s insolvency law has been suspended for six months, lenders have RBI’s stressed asset resolution framework released on 7 June last year to fall back on, said Rajnish Kumar, chairman, State Bank of India (SBI).

In June, President Ram Nath Kovind had promulgated an ordinance suspending the Insolvency and Bankruptcy Code (IBC) for a period of at least six months from 25 March to protect businesses from being dragged to bankruptcy courts.

“That should not matter because in any case, the resolution framework of Reserve Bank of India (RBI) gives a window of about six months to arrive at a resolution framework and only if lenders do not succeed in that period, they have the choice to take the borrower through the legal process of DRT or NCLT," Kumar said at an event organised by industry body FICCI on Thursday.

While DRT stands for Debt Recovery Tribunal, NCLT is the National Company Law Tribunal.

Kumar said that there is enough regulatory leeway available to resolve any stress outside the legal framework. “That is where the 7 June 2019 framework of RBI assumes importance and now a special window has also been provided," he said. “Even outside the legal process, the regulatory framework of RBI provides rules and regulations and the manner in which corporate as well as retail stress can be taken care of."

According to Kumar, there are various estimates about the opportunity in stressed assets owing to covid-19. However, he said he has a slightly contrarian view but does not want to disappoint potential investors.

“From the analysis of my own loan book, I feel that the opportunity may not be as large as it is being made out to be. That would be a happy situation for the country and all of us should wish that this opportunity remains small," said Kumar.

Meanwhile, he also said that SBI is a beneficiary of IBC as it has a rather “dubious distinction" of having the largest stressed assets portfolio in the country. “Not in terms of percentage of our total portfolio but by its absolute size our portfolio is very large, which is almost ₹1.5 trillion," said Kumar.

Live Mint |

SBI chief urges investors to take part in stressed assets sector

State Bank of India (SBI) Chairman Rajnish Kumar on Thursday invited investors to take part in the country's stressed assets sector.

He also reiterated that the Insolvency and Bankruptcy Code (IBC) is not a recovery mechanism for lenders, but rather a means to preserve the value of enterprises.

He was taking part in an industry webinar on 'Opportunities for Investment in Stressed Assets in India' along with Insolvency and Bankruptcy Board of India (IBBI) Chairperson M S Sahoo.

Kumar said given the current situation globally due to the COVID-19 pandemic, it is an opportunity for investors to invest in the stressed assets of the Indian market.

"For everyone it has been a learning experience, including the lenders. All lenders initially thought that for us what matters is the recovery... But on several occasions, I and Mr Sahoo have made it abundantly clear that the purpose of IBC is resolution, it is not recovery mechanism and it is for preserving the value of the enterprises," Kumar said at the webinar organised by industry body FICCI.

There are broadly three major legal or regulatory frameworks under which resolution of stressed assets can take place -- the Companies Act itself, the IBC which was introduced in 2016 and the resolution framework of June 7, 2019 by the Reserve Bank of India, Kumar said.

Speaking about the IBC, Kumar said banks are one of its beneficiaries and given the size of SBI, the law has definitely brought about a paradigm shift in dealing with stressed assets.

"In absolute size, our portfolio is very large, almost ₹1.5 trillion. IBC 2016 has definitely changed and brought paradigm shift as far as dealing with the resolution of stressed assets is concerned.

"And here the IBBI, the lenders committee represented by IBA, they all have worked in close coordination along with the regulators to make the necessary amendments in the law wherever required," he said.

He also said it was an achievement for the country that such a law could be implemented, adding many high profile cases have been resolved under the framework.

Had there been no such law, it would have taken a lot of time for resolution of stressed assets, he said.

"Earlier the cases would never get resolved. So when we talk about the delays of the time taken to resolve the cases, this is a much much improved situation and further steps have been taken by the Ministry of Corporate Affairs to augment the infrastructure around dealing with the cases," he pointed out.

Sahoo said India's position in terms of resolving cases under insolvency has improved to 52nd from 136th earlier, as per the World Bank's ranking.

"India is by far now the best performing country in South Asia in resolving insolvency and is better than the average of the high income economies in terms of recovery rate, time taken and cost of the process," the IBBI chief said.

He said there is a good investment opportunity for investors in the Indian stressed assets market.

"Each of the stress asset is an entry point of investment and investors may invest in distressed assets," Sahoo said.

Bloomberg Quint |

SBI chief urges investors to take partiIn stressed assets sector

State Bank of India Chairman Rajnish Kumar on Thursday invited investors to take part in the country's stressed assets sector.

He also reiterated that the Insolvency and Bankruptcy Code is not a recovery mechanism for lenders, but rather a means to preserve the value of enterprises.

He was taking part in an industry webinar on 'Opportunities for Investment in Stressed Assets in India' along with Insolvency and Bankruptcy Board of India Chairperson M S Sahoo.

Kumar said given the current situation globally due to the Covid-19 pandemic, it is an opportunity for investors to invest in the stressed assets of the Indian market.

"For everyone it has been a learning experience, including the lenders. All lenders initially thought that for us what matters is the recovery... But on several occasions, I and Mr Sahoo have made it abundantly clear that the purpose of IBC is resolution, it is not recovery mechanism and it is for preserving the value of the enterprises," Kumar said at the webinar organised by industry body FICCI.

There are broadly three major legal or regulatory frameworks under which resolution of stressed assets can take place -- the Companies Act itself, the IBC which was introduced in 2016 and the resolution framework of June 7, 2019 by the Reserve Bank of India, Kumar said.

Speaking about the IBC, Kumar said banks are one of its beneficiaries and given the size of SBI, the law has definitely brought about a paradigm shift in dealing with stressed assets.

"In absolute size, our portfolio is very large, almost Rs 1.5 lakh crore. IBC 2016 has definitely changed and brought paradigm shift as far as dealing with the resolution of stressed assets is concerned."

"And here the IBBI, the lenders committee represented by IBA, they all have worked in close coordination along with the regulators to make the necessary amendments in the law wherever required," he said.

He also said it was an achievement for the country that such a law could be implemented, adding many high profile cases have been resolved under the framework.

Had there been no such law, it would have taken a lot of time for resolution of stressed assets, he said.

"Earlier the cases would never get resolved. So when we talk about the delays of the time taken to resolve the cases, this is a much much improved situation and further steps have been taken by the Ministry of Corporate Affairs to augment the infrastructure around dealing with the cases," he pointed out.

Sahoo said India's position in terms of resolving cases under insolvency has improved to 52nd from 136th earlier, as per the World Bank's ranking.

"India is by far now the best performing country in South Asia in resolving insolvency and is better than the average of the high income economies in terms of recovery rate, time taken and cost of the process," the IBBI chief said.

He said there is a good investment opportunity for investors in the Indian stressed assets market.

"Each of the stress asset is an entry point of investment and investors may invest in distressed assets," Sahoo said.

Outlook |

SBI chief urges investors to take part in stressed assets sector

State Bank of India (SBI) Chairman Rajnish Kumar on Thursday invited investors to take part in the country's stressed assets sector.

He also reiterated that the Insolvency and Bankruptcy Code (IBC) is not a recovery mechanism for lenders, but rather a means to preserve the value of enterprises.

He was taking part in an industry webinar on ''Opportunities for Investment in Stressed Assets in India'' along with Insolvency and Bankruptcy Board of India (IBBI) Chairperson M S Sahoo.

Kumar said given the current situation globally due to the COVID-19 pandemic, it is an opportunity for investors to invest in the stressed assets of the Indian market.

"For everyone it has been a learning experience, including the lenders. All lenders initially thought that for us what matters is the recovery... But on several occasions, I and Mr Sahoo have made it abundantly clear that the purpose of IBC is resolution, it is not recovery mechanism and it is for preserving the value of the enterprises," Kumar said at the webinar organised by industry body FICCI.

There are broadly three major legal or regulatory frameworks under which resolution of stressed assets can take place -- the Companies Act itself, the IBC which was introduced in 2016 and the resolution framework of June 7, 2019 by the Reserve Bank of India, Kumar said.

Speaking about the IBC, Kumar said banks are one of its beneficiaries and given the size of SBI, the law has definitely brought about a paradigm shift in dealing with stressed assets.

"In absolute size, our portfolio is very large, almost Rs 1.5 trillion. IBC 2016 has definitely changed and brought paradigm shift as far as dealing with the resolution of stressed assets is concerned.

"And here the IBBI, the lenders committee represented by IBA, they all have worked in close coordination along with the regulators to make the necessary amendments in the law wherever required," he said.

He also said it was an achievement for the country that such a law could be implemented, adding many high profile cases have been resolved under the framework.

Had there been no such law, it would have taken a lot of time for resolution of stressed assets, he said.

"Earlier the cases would never get resolved. So when we talk about the delays of the time taken to resolve the cases, this is a much much improved situation and further steps have been taken by the Ministry of Corporate Affairs to augment the infrastructure around dealing with the cases," he pointed out.

Sahoo said India's position in terms of resolving cases under insolvency has improved to 52nd from 136th earlier, as per the World Bank's ranking.

"India is by far now the best performing country in South Asia in resolving insolvency and is better than the average of the high income economies in terms of recovery rate, time taken and cost of the process," the IBBI chief said.

He said there is a good investment opportunity for investors in the Indian stressed assets market.

"Each of the stress asset is an entry point of investment and investors may invest in distressed assets," Sahoo said.

News Rediff |

Opportunities in stressed assets may not be as large as it has been made out to be: SBI chairman

State Bank of India (SBI) chairman Rajnish Kumar does not expect stress on assets to be as high as it has been projected. As a result, the opportunities for investors in stressed assets may not be as large as it has been made out to be. Kumar said this while speaking at a conference on opportunities for investment in stressed assets in India organised by industry body FICCI.

Rajnish Kumar said various estimates were going around on the amount of stress that could emerge in the aftermath of Covid-19. However, he said, “At SBI, I have a little contrarian view, and I do not want to disappoint potential investors.” Analysis of SBI’s loan book shows that the opportunity may not be as large as it has been made out to be. “And that would be a happy situation for country as well that opportunity remains small and not large,” he added.

FE had earlier reported that SBI expects 5% of its outstanding loans to come up for restructuring even though 72% of corporate loans in the system are under stress. The Reserve Bank of India (RBI) had earlier allowed restructuring of personal and corporate loans with strict boundaries.

Rajnish Kumar said there was complete clarity on restructuring of corporate loans due to recommendations of Kamath committee. The central bank had earlier accepted recommendations made by a committee under KV Kamath for restructuring of corporate loans. The central bank specified five key ratios across 26 sectors, which lenders must follow while restructuring of corporate accounts impacted by Covid-19. Kumar also said that SBI has set up category 1 real estate fund to look at the opportunities in the sector.

New on News |

SBI open to global partnership for resolution of stressed assets: Chairman

The State Bank of India will work with global investors for putting funds into corporate distressed assets in the country.

Being the largest lender in the country, SBI can, as a local entity, partner with international investors interested in distressed assets, its chairman Rajnish Kumar, said addressing webinar organised by FICCI- Consulate General of India, New York (US).

Apart from the bank, SBI Caps Ventures, a step down subsidiary, can provide support and also forge alliance for such business opportunities. SBI Cap Ventures is already managing the government backed fund for completing stalled residential real estate projects. “The bank is in dialogue with potential investors, but there is no specific plan before us,” he said.

The economic disruption in the wake of the Covid-19 pandemic has put a severe strain on various industries, with the Kamath panel identifying 26 industries. The stress is more visible in realty, aviation, hospitality and power sectors.

The debt recast opportunity exists in Covid-impacted companies as well as those which were also facing stress and are now facing more pain due to the economic slowdown.

According to rating agency ICRA, the total quantum of the debt which can get restructured will be between Rs 6 trillion and Rs 10 trillion. Banks have an asset book of Rs 100 trillion and another Rs 35 trillion is from the non-bank lenders.

“While estimates about debt restructuring could vary, distressed asset opportunity is not as large as it is made out to be,” the SBI chairman said.

The estimate on the amount of portfolio to be restructured is based on an assumption that the overall assets under moratorium came down to 20-25 per cent by the close of the six-month relief in August, ICRA said.

A part of the assets enjoying the moratorium are special mention accounts where repayments were due for 31 to 89 days, which cannot be restructured under the new guidelines.

Yahoo Finance |

SBI chief urges investors to take part in stressed assets sector

State Bank of India (SBI) Chairman Rajnish Kumar on Thursday invited investors to take part in the country's stressed assets sector.

He also reiterated that the Insolvency and Bankruptcy Code (IBC) is not a recovery mechanism for lenders, but rather a means to preserve the value of enterprises.

He was taking part in an industry webinar on 'Opportunities for Investment in Stressed Assets in India' along with Insolvency and Bankruptcy Board of India (IBBI) Chairperson M S Sahoo.

Kumar said given the current situation globally due to the COVID-19 pandemic, it is an opportunity for investors to invest in the stressed assets of the Indian market.

'For everyone it has been a learning experience, including the lenders. All lenders initially thought that for us what matters is the recovery... But on several occasions, I and Mr Sahoo have made it abundantly clear that the purpose of IBC is resolution, it is not recovery mechanism and it is for preserving the value of the enterprises,' Kumar said at the webinar organised by industry body FICCI.

There are broadly three major legal or regulatory frameworks under which resolution of stressed assets can take place -- the Companies Act itself, the IBC which was introduced in 2016 and the resolution framework of June 7, 2019 by the Reserve Bank of India, Kumar said.

Speaking about the IBC, Kumar said banks are one of its beneficiaries and given the size of SBI, the law has definitely brought about a paradigm shift in dealing with stressed assets.

'In absolute size, our portfolio is very large, almost Rs 1.5 trillion. IBC 2016 has definitely changed and brought paradigm shift as far as dealing with the resolution of stressed assets is concerned.

'And here the IBBI, the lenders committee represented by IBA, they all have worked in close coordination along with the regulators to make the necessary amendments in the law wherever required,' he said.

He also said it was an achievement for the country that such a law could be implemented, adding many high profile cases have been resolved under the framework.

Had there been no such law, it would have taken a lot of time for resolution of stressed assets, he said.

'Earlier the cases would never get resolved. So when we talk about the delays of the time taken to resolve the cases, this is a much much improved situation and further steps have been taken by the Ministry of Corporate Affairs to augment the infrastructure around dealing with the cases,' he pointed out.

Sahoo said India's position in terms of resolving cases under insolvency has improved to 52nd from 136th earlier, as per the World Bank's ranking.

'India is by far now the best performing country in South Asia in resolving insolvency and is better than the average of the high income economies in terms of recovery rate, time taken and cost of the process,' the IBBI chief said.

He said there is a good investment opportunity for investors in the Indian stressed assets market.

'Each of the stress asset is an entry point of investment and investors may invest in distressed assets,' Sahoo said.

Devdiscourse |

SBI chief urges investors to take part in stressed assets sector

State Bank of India (SBI) Chairman Rajnish Kumar on Thursday invited investors to take part in the country's stressed assets sector. He also reiterated that the Insolvency and Bankruptcy Code (IBC) is not a recovery mechanism for lenders, but rather a means to preserve the value of enterprises. He was taking part in an industry webinar on 'Opportunities for Investment in Stressed Assets in India' along with Insolvency and Bankruptcy Board of India (IBBI) Chairperson M S Sahoo. Kumar said given the current situation globally due to the COVID-19 pandemic, it is an opportunity for investors to invest in the stressed assets of the Indian market. "For everyone it has been a learning experience, including the lenders. All lenders initially thought that for us what matters is the recovery... But on several occasions, I and Mr Sahoo have made it abundantly clear that the purpose of IBC is resolution, it is not recovery mechanism and it is for preserving the value of the enterprises," Kumar said at the webinar organised by industry body FICCI. There are broadly three major legal or regulatory frameworks under which resolution of stressed assets can take place -- the Companies Act itself, the IBC which was introduced in 2016 and the resolution framework of June 7, 2019 by the Reserve Bank of India, Kumar said.

Speaking about the IBC, Kumar said banks are one of its beneficiaries and given the size of SBI, the law has definitely brought about a paradigm shift in dealing with stressed assets. "In absolute size, our portfolio is very large, almost Rs 1.5 trillion. IBC 2016 has definitely changed and brought paradigm shift as far as dealing with the resolution of stressed assets is concerned. "And here the IBBI, the lenders committee represented by IBA, they all have worked in close coordination along with the regulators to make the necessary amendments in the law wherever required," he said.

He also said it was an achievement for the country that such a law could be implemented, adding many high profile cases have been resolved under the framework. Had there been no such law, it would have taken a lot of time for resolution of stressed assets, he said. "Earlier the cases would never get resolved. So when we talk about the delays of the time taken to resolve the cases, this is a much much improved situation and further steps have been taken by the Ministry of Corporate Affairs to augment the infrastructure around dealing with the cases," he pointed out.

Sahoo said India's position in terms of resolving cases under insolvency has improved to 52nd from 136th earlier, as per the World Bank's ranking. "India is by far now the best performing country in South Asia in resolving insolvency and is better than the average of the high income economies in terms of recovery rate, time taken and cost of the process," the IBBI chief said.

He said there is a good investment opportunity for investors in the Indian stressed assets market. "Each of the stress asset is an entry point of investment and investors may invest in distressed assets," Sahoo said.

Business Standard |

SBI's Rajnish Kumar urges investors to take part in stressed assets sector

State Bank of India (SBI) Chairman Rajnish Kumar on Thursday invited investors to take part in the country's stressed assets sector.

He also reiterated that the Insolvency and Bankruptcy Code (IBC) is not a recovery mechanism for lenders, but rather a means to preserve the value of enterprises.

He was taking part in an industry webinar on 'Opportunities for Investment in Stressed Assets in India' along with Insolvency and Bankruptcy Board of India (IBBI) Chairperson M S Sahoo.

Kumar said given the current situation globally due to the Covid-19 pandemic, it is an opportunity for investors to invest in the stressed assets of the Indian market.

"For everyone it has been a learning experience, including the lenders. All lenders initially thought that for us what matters is the recovery... But on several occasions, I and Mr Sahoo have made it abundantly clear that the purpose of IBC is resolution, it is not recovery mechanism and it is for preserving the value of the enterprises," Kumar said at the webinar organised by industry body FICCI.

There are broadly three major legal or regulatory frameworks under which resolution of stressed assets can take place -- the Companies Act itself, the IBC which was introduced in 2016 and the resolution framework of June 7, 2019 by the Reserve Bank of India, Kumar said.

Speaking about the IBC, Kumar said banks are one of its beneficiaries and given the size of SBI, the law has definitely brought about a paradigm shift in dealing with stressed assets.

"In absolute size, our portfolio is very large, almost Rs 1.5 trillion. IBC 2016 has definitely changed and brought paradigm shift as far as dealing with the resolution of stressed assets is concerned.

"And here the IBBI, the lenders committee represented by IBA, they all have worked in close coordination along with the regulators to make the necessary amendments in the law wherever required," he said.

He also said it was an achievement for the country that such a law could be implemented, adding many high profile cases have been resolved under the framework.

Had there been no such law, it would have taken a lot of time for resolution of stressed assets, he said.

"Earlier the cases would never get resolved. So when we talk about the delays of the time taken to resolve the cases, this is a much much improved situation and further steps have been taken by the Ministry of Corporate Affairs to augment the infrastructure around dealing with the cases," he pointed out.

Sahoo said India's position in terms of resolving cases under insolvency has improved to 52nd from 136th earlier, as per the World Bank's ranking.

"India is by far now the best performing country in South Asia in resolving insolvency and is better than the average of the high income economies in terms of recovery rate, time taken and cost of the process," the IBBI chief said.

He said there is a good investment opportunity for investors in the Indian stressed assets market.

"Each of the stress asset is an entry point of investment and investors may invest in distressed assets," Sahoo said.

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