Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2022, affirmed that changes have been proposed in the Insolvency and Bankruptcy Code (IBC) to enable seamless cross-border insolvency and quicker dispute resolution. She also stated that necessary amendments would be made in the IBC for more efficient dispute resolution.
In the face of mounting NPAs, the Insolvency and Bankruptcy Code 2016 helped consolidate a framework to reform laws and regulations for bankruptcy in India. A robust legal structure and level-playing field for foreign and domestic investors and defined timelines for the resolution of distressed enterprises have been inculcated in the Indian ecosystem. It's also led to India's position rising in the World Bank's Ease of Doing Business Index. It's been pivotal to build the rock on which a New India can be built. Distressed assets can provide opportunities for purchasing great assets and bring in strategic investors.
What caveats apply, amongst the hullaballoo of activity? Are the risks commensurate with the rewards? What strategies and structures need to be employed? What are the opportunities arising that need to be leveraged? What needs to be put under the spotlight in the stressed asset space? All of this and much more from bankers, investors, policymakers and other key stakeholders at India’s most compelling thought leadership forum at the VCCircle Stressed Assets Investment Summit 2022.
By Shalil Gupta, Business Head, Mosaic Digital & Mint
Overview of Stressed Assets Sector in India - the Banking system is currently at an inflection point with respect to stressed assets, and while the recent prognosis on fresh slippages have improved, resolution of previous stressed assets is yet to pick satisfactory pace. In this context, what is the impact of the various initiatives taken by the Government of India & regulators in the past 4-5 years? Also, what is the outlook from an overall Banking system perspective on future prognosis and resolution? Further, how are bankers approaching the issue with respect to adopting a calibrated approach to maximize resolution/ recoveries through various strategies depending on the contours of the underlying businesses?
By Akash Suri, Group President and National Head, Asset Reconstruction and Management, Yes Bank
There's a "buy low and sell high" strategy tied to distressed assets that creates a turnaround at reasonable valuations. As an investor, how can you navigate these turbulent waters? What kind of robust due diligence is required? What traps exist to ensnare investors and how can they be avoided? How can there be a creation of excess value?
By Ankur Gupta, Managing Partner, Real Estate, Brookfield Asset Management
Before, India had robust growth and banks augmented their loan books rapidly. However, it was short-lived with project approval delays, decline in commodity prices and cost overruns. All of this led to the quantum of stressed loans in the banking system. We witnessed how the COVID-19 pandemic only vitiated that stress. The banking sector non-performing assets (NPAs) in India aren estimated at over 10% of assets at about $135 billion. Global distressed debt investors have made some waves in India, with dynamic insolvency laws breeding a credit-friendly environment. How can this regulatory regime bring out the best opportunities? How can these opportunities be leveraged? What does the road pave for India's distressed debt market?
Speakers:
Ambrish Singh, Managing Director - Head of Loans & Principal Investments (India), Nomura
Prasan Dhar, Partner – Banking and Finance, Trilegal
Moderator: Ashok Rajgopal, Partner Recovery & Reorganisation, Grant Thornton Bharat
Distressed asset deals usually have their own risks and complexities. The COVID-19 pandemic exacerbated these risks and complexities, making it more and more cumbersome to purchase distressed assets. The IBC regime assuaged that and provided more legitimacy to M&As. How have NPAs been restructured and rehabilitated? What's the resolution plan of the CIRP for transferring assets, acquiring shares and divestment? What are the prospects for M&A deals in 2022?
Anshul Jain, Partner, PricewaterhouseCoopers Pvt. Ltd. in conversation with Sunil Mehta, Chairman & MD, SPM Capital Advisers Pvt Ltd & former country head AIG India
The banking system, brimming with losses, seems like it needs bad banks to handle stressed assets. Recently receiving regulatory approval, the NARCL would acquire NPA accounts from banks and the IDRCL would handle the debt resolution process. What are the issues to be ironed out in the present to prevent them from snowballing in the future? What are the resolution techniques to showcase brownfield assets and entice investors? How could there be effective value realization?
Speakers:
Hari Hara Mishra, Director, UV Asset Reconstruction Company Ltd.
Sanjay Tibrewala, Chief Executive Officer, Phoenix ARC Private Ltd.
Moderator: Anshul Jain, Partner - Deals | Tax & Regulatory, PricewaterhouseCoopers Private Limited
Ankur Gupta is a Managing Partner in Brookfield’s Real Estate Group, Country Head for Brookfield in India, and Head of Real Estate for India and the Middle East. In these roles, he oversees all of Brookfield’s activities in India, and Brookfield’s real estate business in India and the Middle East.
Prior to joining Brookfield in 2012, Mr. Gupta worked for a leading real estate development firm.
Mr. Gupta holds a Master of Business Administration degree from Columbia Business School and a Bachelor of Technology degree from the Indian Institute of Technology, Bombay.
Prasan is an experienced debt finance lawyer and regularly acts for lenders as well as sponsors on significant and complex debt finance mandates. He has particular experience in special situations, distressed debt and restructuring and insolvency matters.
His clients include several private credit funds and platforms, international banks development finance institutions and multilateral lenders.
Prior to joining Trilegal, Prasan worked for many years in the finance practice of a global law firm in London, advising on high-value emerging markets transactions.
Sanjay has over 25 years of diverse post qualification experience in the area of Finance having worked in manufacturing industry, travel services and banking and financial services. The last 12 of this has been with Phoenix ARC Pvt. Ltd, a leading ARC in India, initially as Chief Financial Officer, and currently as Chief Executive Officer.
Sanjay was a part of the initial team of Phoenix and has witnessed and influenced the changes the industry has gone through in the past decade. He has been actively involved in the entire gamut of distressed assets business; restructuring of distressed companies, resolution of NPAs through negotiations / legal means and also in acquiring portfolios and single assets from various banks and Financial Institutions all over India.
Sanjay is a commerce graduate and a Chartered Accountant. He is also a Company Secretary and a Cost Accountant.
Trilegal is one of India's leading law firms with offices in Mumbai, New Delhi, Bangalore and Hyderabad. Our award winning private equity (PE) practice encompasses the entire range of services provided to PE funds, including funds formation, funds structuring, primary and secondary investments, investment restructuring and exits. Our clients include the world’s top PE firms, a diverse range of international funds and institutional investors seeking to invest across all sectors.
In addition to regularly advising on leading PE investment transactions, a significant portion of our practice is geared toward offering high-level strategic advice for ongoing portfolio management, restructuring of existing investments and effective exit strategies for PE investors. We have advised on several restructuring/exit transactions involving share purchases and options, enabling listing (in domestic and foreign markets), asset sales, asset/share swaps, demergers, capital reorganization, third party (strategic or financial) sales and various bespoke structures.
Trilegal’s lawyers are trained to adopt strategic and solution oriented perspectives to legal advice. Our firm’s energy and dynamism, combined with deep experience of the Indian market and a practical problem-solving approach distinguishes our PE practice and provides our clients with a unique offering in the Indian legal market.
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