Overview
While India's financial stability was on a defined trajectory, COVID-19 disrupted everything and exacerbated the trouble with stressed assets. Experts have opined that the second wave of COVID-19 would probably worsen stressed assets in the banking system. This has been seen as a case of one step forward, two steps back.
Since 2015, the Indian banking system has been acquiescing crack after crack under the burden of NPAs (non-performing assets). To combat this, mechanisms like the Insolvency and Bankruptcy Code was implemented to deal with the blowback ending up with the pandemic causing the situation to go back to square one. The RBI alleges that NPAs could go up to 13.5% by the end of this year and with an unsupportive macroeconomic framework, may end up going to 14.8% as well. This is going to continue to weaken India's financial stability with low credit growth and can see it happening.
Furthermore, India has a history of bad debt and a pattern of not being able to size up the issues at hand. One solution is to launch a bad bank with the goal of housing bad loans, but experts believe it would be a long time before it starts to be effective and this can only truly facilitate change if the assets get resolved and aren't just kept stagnant like in a storage facility. How do we better resolutions and accelerate digital infrastructure to combat this? Is it feasible? Will the cracks deepen? The gravity of the situation at hand and the rise in bad banks has reoriented the discourse surrounding stressed assets.
We need to ascertain the strategies and what structures one can employ as buyers, as well as assess the complexities and arising opportunities there would be in the stressed asset space. All of this and much more from bankers, policymakers, investors and other key stakeholders at India’s most compelling thought leadership forum at the VCCircle Stressed Assets Investment Summit 2021 on August 13, 2021 on a virtual platform.
Agenda
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9:50 AM – 10:00 AM
Opening Address
By Jaideep Mehta, CEO, Mosaic Digital & Head, Mint
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10:00 AM – 10:35 AM
Panel Discussion 1: Pre-pack Insolvency: A relief to MSMEs?
Pandemic has pushed many companies specially MSMEs to go for insolvency due to disturbances in macroeconomic factors. In most of the cases, it isn’t attributed to company’s internal factors. To help such MSMEs, the government has announced pre-packed insolvency resolution. Is it going to help MSMEs? The session would focus on how the creditors are protected and how is it better than CIRP?
Speakers:
Eshwar Karra, CEO-Kotak Special Situations Fund, Kotak Investment Advisors Limited
Amit Kansal, Chief Investment Officer, Aditya Birla Stressed Asset AMC Pvt. Ltd.
Dr. Fareed Ahmed, Former Executive Director, Punjab & Sind BankModerator:
Shrija Agrawal, Executive Editor, Hindustan Times Digital
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10:35 AM – 11:10 AM
Panel Discussion 2: The Resolve Of Bad Banks
Soon, we may have a bad bank. The Indian Banks’ Association (IBA) has a plan to establish a 6000 crore rupees NARCL (The National Asset Reconstruction Company Limited). The goal to clean up the bank books has also been prominently voiced. The idea is to manage the bad debt of public sector banks and other financial institutions. But how is it different from other ARCs (asset reconstruction companies)? Would there be additional tools of resolution? What are feasible roads for this?
Speakers:
Nitin Jain, Senior Partner, AAA Insolvency Professionals LLP
Pradeep Goel, CMD, Prudent ARC Limited; Chairman, ASSOCHAM National Council for ARCs & Vice -Chairman, ARC Association
Girish Sharan Sinha, MD & CEO, ASREC (India) Ltd.Moderator:
Nilesh Kumar Gupta, Partner, McKinsey & Company
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11:10 AM – 11:30 AM
Special Address: Distressed investing - Indian opportunity on a global stage
By Neeraj Seth, Managing Director, Head of Asian Credit, BLACKROCK
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11:30 AM – 12:05 PM
Panel Discussion 3: Financial Institutions Under Stress: What lies ahead?
The RBI’s Financial Stability Report disclosed that GNPAs of financial institutions (NBFCs) increased to 6.3% as of March 2020 from 5.3% as of March 2019. The asset quality of NBFCs is expected to deteriorate further due to disruption of business operations caused by the pandemic. Many NBFCs are filling for insolvency due to the stressed assets and liquidity crunch. One such recent example is of DHFL. There are many opportunities which lies in the sector. How can these opportunities be leveraged? Would finding a new investor/owner for stressed NBFCs solve the problem?
Speakers:
Raman Aggarwal, Director, Finance Industry Development Council
Shreeram Sethuraman, MD & Head - Financial Institutions Coverage, BNP Paribas India
Ashwyn Misra, Partner, TrilegalModerator
Dinesh Arora, Partner & Leader - Deals, PwC India
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12:05 PM – 12:40 PM
Panel Discussion 4: New Stress Pockets: Impact and the way forward
In December 2020, global financial services firm, Macquarie Securities has predicted gross NPAs in the retail portfolio to double to 4%, mentioning that market shouldn’t be concerned over retail defaults. However, with the second wave of Covid, unsecured personal loans, credit card outstanding, business banking and MSMEs became new pockets for NPAs. It involves loans worth INR 28-30 lakh crore accounting for 30% of the total bank loan book.
In 2020-21, the banks' maximum slippages have been coming from retail portfolio. Now, private banks have a higher share price of unsecured retail whereas PSBs have more stressed MSMEs in their portfolios. How should bank deal with this situation? How to resolve retail NPAs problem and what is the way forward?Speakers:
Manish Nihalani, Chief Operating Officer, Alchemist Asset Reconstruction Company Ltd.
Ramakant Rai, Partner, Trilegal
Anuj Kumar, MD & CEO, Pepper India Advisors Pvt Ltd.
Anshuman Panwar, Co-Founder, Creditas SolutionsModerator:
Rajiv Chandak, Partner-Restructuring, Deloitte India
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12:40 PM – Onwards
End of Conference
Speakers 2021
Neeraj Seth
Managing Director, Head of Asian Credit, BLACKROCKAmit Kansal
Chief Investment Officer, Aditya Birla Stressed Asset AMC Pvt. Ltd.Eshwar Karra
CEO-Kotak Special Situations Fund, Kotak Investment Advisors LimitedRaman Aggarwal
Director, Finance Industry Development CouncilManish Nihalani
Chief Operating Officer, Alchemist Asset Reconstruction Company Ltd.Nitin Jain
Senior Partner, AAA Insolvency Professionals LLPPradeep Goel
CMD, Prudent ARC Limited; Chairman, ASSOCHAM National Council for ARCs & Vice -Chairman, ARC AssociationGirish Sharan Sinha
MD & CEO, ASREC (India) Ltd.Shreeram Sethuraman
MD & Head - Financial Institutions Coverage, BNP Paribas IndiaNilesh Kumar Gupta
Partner, McKinsey & CompanyDr. Fareed Ahmed
Former Executive Director, Punjab & Sind BankRajiv Chandak
Partner-Restructuring, Deloitte IndiaAshwyn Misra
Partner, TrilegalDinesh Arora
Partner & Leader - Deals, PwC IndiaAnuj Kumar
MD & CEO, Pepper India Advisors Pvt Ltd.Anshuman Panwar
Co-Founder, Creditas SolutionsRamakant Rai
Partner, TrilegalDo you have any queries?
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