India Inc, which was already facing a huge challenge due to an economic slowdown, is now staring at an even deeper abyss as gross domestic product is likely to shrink in the current fiscal year because of the lockdown’s impact.
While the government has put in place circuit breakers to calm the financial system with a moratorium on loan payments and a clamp on fresh insolvency filings for a year, lenders believe it will at best delay the inevitable storm. Lenders are likely to take a big hit as companies struggle to remain above water due to the demand shock from lockdown.
Some analysts estimate the overall impact could see banks and non-banking financial companies (NBFCs) adding as much as Rs 10 trillion, or $130 billion, in additional gross non-performing assets (NPAs). This would erode the improvement that was noticed last year with a decline in the NPA ratio.
Almost four years after the Insolvency and Bankruptcy Code – the country’s bankruptcy law – came into effect, close to 4,000 cases have been admitted into insolvency courts. More than half of these cases remain unresolved. A quarter of the total have ended up in liquidation, and resolution has been achieved in only 6% cases.
While regulatory challenges remain and the suspension in fresh filings will impact deal activity, the stressed assets segment continues to be lucrative – not just for strategic buyers looking at attractive assets that have been shrouded under the cloud of debt, but also for financial investors. In particular, stressed assets funds are warming up to the new regulatory regime and see lot of opportunities to turnaround good quality assets.
To assess the progress of the bankruptcy law, structures and strategies being adopted by buyers as well as emerging challenges, VCCircle is organising the fourth edition of its Stressed Assets Investment Summit on August 6, 2020 on a virtual platform.
By Jaideep Mehta, CEO, Mosaic Digital
By C.S. Setty, MD, SBI
New IBC cases have been put on pause and resolution of existing cases has also suffered as would-be buyers are trying to fix their own demand problem or renegotiating pricing. How can lenders and other participants in the stressed assets ecosystem navigate through the challenges?
Speakers:
Vaibhav Chadha, MD, head Asia Distressed debt & Special Situations, Cantor Fitzgerald
Nirmal Gangwal, Founder, Brescon Advisors
Utsav Baijal, Sr Partner & MD, Apollo Management
Misha, Partner, Shardul Amarchand Mangaldas
Moderator: Beena Parmar, Special Correspondent, VCCircle
By Shardul S. Shroff, Executive Chairman; National Practice Head - Insolvency & Bankruptcy, Shardul Amarchand Mangaldas & Co
Beena Parmar, Special Correspondent, VCCircle in conversation with Sunil Mehta, Non-Executive Chairman, Yes bank; Former Chairman, PNB; Chairman & MD, SPM Capital Advisers Pvt. Ltd
Big borrowers tend to get the eyeballs of buyers and priority in resolution from lenders desperate to clean their books. But a lot of dirt is in the middle market. How do stressed assets funds and strategic buyers look at this piece? Are there new pockets of stressed assets in the traditionally lucrative retail end of the lending business with job losses? Are there buyers for loan books in consumer finance? How are those aiming at SMEs dealing with the expected deluge in bankruptcies?
Speakers:
Hari Hara Mishra, Director, UV ARC
Manish Lalwani, CEO and MD, Omkara ARC
Sanjay Tibrewala, CEO, phoenix ARC
Moderator: Aman Malik, Senior Editor, VCCircle
The government has tried to provide a gush of liquidity in the banking as well as NBFC world with its stimulus plan but is that enough to mitigate the heightened risk profile of companies of all sizes? Credit Street is once again debating the concept of a bad-loan bank and its viability as also what form—an AMC or an AIF—it should take. What will entice the debt-averse investors?
Speakers:
Venkattu Srinivasan, Director, Phoenix ARC
Samuel Joseph Jebaraj, Deputy MD, IDBI Bank
Suraj Kalyanraman, Account Manager - South Asia, Intralinks Inc.
Moderator: Bruhadeeswaran R, Assistant Editor, VCCircle
Mr. Shardul S. Shroff is the Executive Chairman at the Firm. He has over 39 years of experience in General Corporate, Mergers & Acquisitions, Insolvency and Bankruptcy, Securities Law, Disinvestment & Capital Markets. Mr. Shroff heads the Insolvency & Bankruptcy practice at the Firm. He is a leading authority on matters related to Corporate Governance, Mergers & Acquisitions, Government Regulation and Bankruptcy & Insolvency Law. He has been instrumental in developing these practice domains in the Firm.
Widely regarded as a pioneer in the field of Corporate Law, Mr. Shroff has participated in the training and drafting of several important economic legislations and company law reforms in India. He has recently been appointed as a member of the Company Law Committee constituted by the Government to look into recommendations on various provisions of the Companies Act, 2013 and the Limited Liability Partnerships Act, 2008. He has also been a member of the Insolvency Law Committee constituted to review the implementation of the Insolvency and Bankruptcy Code. Mr. Shroff was a member of the Committee constituted to review decriminalization of offences under the Companies Act and the Committee on crossborder insolvency, both headed by Injeti Srinivas, Secretary, Ministry of Corporate Affairs, Government of India. Under Mr. Shroff’s leadership, the Firm has been recognised as ‘Best in Insolvency’ at the Asialaw’s Asia Pacific Dispute Resolution Awards 2018.
Mr. Shroff has been on a number of other high-powered committees appointed by the Government of India including the JJ Irani Committee for amending the Companies Act, the Expert Committee on maintenance of Cost Records and Cost Audit in 2014, the Eradi Committee involved in the insolvency provisions of the Companies Act, 1956, the second Naresh Chandra Committee appointed to look into aspects of SMEs and simplification of Company Law and the Valuation Committee.
Mr. Shroff has been consistently recognised as a leading lawyer by several international fora and publications, including the Who’s Who Legal, AsiaLaw, Chambers and Partners, Legal 500, Euromoney, International Financial Law Review (IFLR) etc. Chambers and Partners has recognised him as an ‘Eminent Practitioner’ for Banking & Finance and as a ‘Star Individual’ for Corporate/M&A. IFLR1000 2020, the guide to the World’s Leading Financial Law Firms, has adjudged Mr. Shroff as a ‘Market Leader’ in the areas of Mergers & Acquisitions, Banking, Restructuring & Insolvency, Capital Markets, Energy and Infrastructure, Project Finance and Project Development.
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.
Mr. Nirmal Gangwal, is an investment banker specialising in crafting financial solutions, liabilities management, recapitalization, debt resolution, financial restructuring and divestments with over 39 years of experience. He is the founder and chairman of Brescon Group, India’s first and one of the largest independent investment bank specialized in special situations and stressed assets advisory for last two decades. Brescon & Gangwal have become synonymous with “Regenerating Value” and “Creating Opportunity in Adversity” out of special situations and stressed assets. If increase in market capitalisation of the top 25 cases is considered as benchmark for value creation, Gangwal has created 16x value for its clients leading to market capitalisation of over $13 bn. He has guided more than 300 corporates in their growth phase as well as in stress by way of liabilities management in excess of USD$ 20 bn (INR 1,40,000 crores). He has also advised public sector banks to find possible ways and means to improve upon Capital Adequacy Ratio post Basel III requirements. Well regarded by the industry for his out-of-the box thinking capabilities, he advised one of the premier public sector bank in improving capital adequacy ratio by recapitalisation of the real estate value. He has deep insights in the special situations and stressed assets market and is often regarded to have one of the sharpest financial minds across India.
He has been a thought leader in Special Situation Advisory, bringing several innovative ideas to the attention of regulators and policy makers from time to time and was part of the Working Group formulated for implementation of the latest Insolvency and Bankruptcy Code 2016 by Government of India. Recently, Mr. Gangwal is working on setting up a not-for-profit online advisory platform for helping stressed companies in the Small and Medium Enterprises (SMEs) sector wherein he plans to advise these companies in their debt resolution. The team is working on the initial beta version of the digital platform.
Mr. Baijal is a Senior Partner and Management Director with Apollo Management’s India office. He joined Apollo the firm in its New York office in 2008 and has worked actively on private equity, mezzanine and credit investments across the US and Asian markets. In 2012, he helped Apollo establish a joint venture with ICICI Bank and helped raise one of the largest India dedicated funds, AION. Prior to Apollo, Mr. Baijal was with the private equity team at Bain Capital in Boston (from 2005 to 2008), where he worked extensively on consumer and retail opportunities. Mr. Baijal spent five years as a consultant with McKinsey & Company across the New Delhi and Hong Kong offices and was one of the founding members of the firm’s corporate finance practice in India. During his tenure at Mckinsey, he also completed a secondment at the Indian School of Business working for the Dean’s office and assisting in several aspects of institution building. He is on the Board of several companies, including IGT Solutions and PlanetCast Media Services Limited. Mr. Baijal graduated summa cum laude from St. Stephen’s College/University of Delhi with a BA in economics. He also completed his MBA from Indian Institute of Management, Ahmedabad, where he was an Industry Scholar. He is an Aspen Fellow and the recipient of the 2018 IIMA Young Alumni Achiever Award.
Hari Hara Mishra is an ex-banker from State Bank of India (SBI), having joined as a probationary officer of 1982 batch. After two decades of working in SBI, he shifted in 2014 to join first Asset Reconstruction Company India Limited. For last 15 years he has been working with various Asset Reconstruction Companies (ARC). At present, he is a professional director in UV Asset Reconstruction Company Ltd. He has been part of various regulatory initiatives on ARC Sector. He was a member of leading Industry body Assocham’s special task force in 2017 to deliberate on setting up of a bad bank in India*.
He writes in various publications and speaks on various occasions and appears on print/electronic media. In 2013, he was winner of readers’ choice for 2nd annual ‘World’s great investment columnist’ contest held by Wall Street Journal’s web portal MarketWatch.
Mr. Lalwani holds a Master’s Degree of Commerce from the Gujarat University and is also a Chartered Accountant. He has over 15 Years of experience in Distressed Assets and Financial Services Business. Mr. Lalwani has been instrumental in setting and scaling up Omkara ARC’s Operations. Prior to being the Managing Director & CEO of Omkara ARC, he was the founder director of the Areion Group - providing various services related to advisory of Stressed Assets, Insolvency Professionals, and Asset Management Company (Fund). He has driven various deals and enjoys good relationships with financial institutions and Investors. Early in his career he has worked across sectors viz. Iron & Steel, Real Estate, Hospitality, Educational, Health, Textile, and Automotive, as part of corporate restructurings and special situations.
Venkattu Srinivasan heads the Asset Reconstruction Division (ARD) at Kotak Mahindra Bank Limited.
He is part of the Bank’s Group Management Council that drives and oversees the Kotak Mahindra Bank’s growth charter.
Venkattu pioneered the business of purchasing distressed assets and Non-Performing Loans (NPL) in India and was instrumental in establishing the Asset Reconstruction Division at Kotak Mahindra Bank.
He executed the first-ever cash NPL transaction in India in 2003, and over the years has completed several restructuring initiatives to unlock value from distressed assets. His focus lies in creating new lending opportunities in the marketplace.
Venkattu has close to three decades of experience in financial services. He joined Kotak Mahindra Group in 1993, and has played a crucial role in setting up several lending businesses such as
commercial vehicle loans, tractor finance, construction equipment, farm equipment, SARAL business loans for purchase of commercial vehicles, etc.
Venkattu is on the Board of Phoenix Asset Reconstruction Company Pvt. Ltd., promoted by the Kotak Mahindra group of companies.
Venkattu is a Management Graduate from BSMED, Coimbatore and is a Cost Accountant (ICWA). He has also completed the ”Advanced Management Program” from Harvard Business School, the “Accelerated Development Program” from London Business School and the “Advanced Management Program” from Kellogg School of Management.
Mr. Jebaraj has about 27 years of experience in Project & Trade finance. He was in-charge of the Loan Recovery & HR Groups at Exim Bank’s Head Office in Mumbai just before assuming charge as Dy. Managing Director of IDBI Bank Ltd. At EXIM, he was in-charge of the Treasury, Resources, Accounts, and IT Groups. Earlier he was in-charge of the Corporate Banking Group including SME & Agri Finance. Previously he was head of Exim Bank’s offices in London, Milan & Hyderabad.
He is a regular speaker on Banking, Trade Finance, Project Finance, SME Banking, etc. Have led various consultancy assignments for setting up a Commonwealth Exim Bank, Trade Finance Facility for Small Island States for the Commonwealth Secretariat in London, Introduction of Film Financing program for the Exim Bank of Nigeria, Setting up of an Exim Bank for the Kingdom of Saudi Arabia, etc.
He was a member of the Task Force on ‘Financial solutions for R&D in the Pharmaceutical Sector’ set up by the Ministry of Commerce & Industry, Government of India. Is also a member of the ‘BRICS Rating Agency Expert Group’ under the aegis of the BRICS Business Council.
He represented Exim Bank as Nominee Director on a few corporate Boards. Presently represent IDBI Bank on the Boards of IDBI Capital Markets Ltd., IDBI Trusteeship Services Ltd. & IDBI MF Trustee Company Ltd.
He joined IDBI Bank as Dy. Managing Director on September 20, 2019. Directly responsible for Large & Mid Corporate Groups, NPA Management, Overseas operations, Transaction Banking, Credit Monitoring, Finance & Accounts, IT, MIS, Digital Banking & HR in the Bank.
Suraj Kalyanaraman’s main priority is helping facilitating high-stake Strategic Transactions like M&As, IPO, Capital Raising, Audits, Restructuring, Investor and Client Communication/Collaboration, through highly secure and IRM driven technology solutions.
His B2B sales experience has been with companies providing IT and ITES services, and have worked with financial advisors and end clients across various sectors like BFSI, Infrastructure, Pharma, IT etc.
The biggest assets that he has acquired is Adaptability and Perseverance. Mr. Kalyanaraman’s education background includes a Bachelors in Technology and an MBA from NMIMS, Mumbai.
Ms Misha is a Partner in the Firm's Dispute Resolution practice with almost 15 years of experience. With the enactment of the Insolvency and Bankruptcy Code, 2016, she has been spearheading the Insolvency and Bankruptcy practice at the Firm while consolidating her experience in corporate insolvency, restructuring and banking matters under the old regime.
Misha has been involved in 10 out of the 12 largest non-performing asset (“NPA”) accounts referred for the insolvency resolution process under the Code by the central bank - Reserve Bank of India.
Some of her marquee representations include representing & advising:
Misha regularly contributes to various thought leadership platforms, some of which are highlighted below:
Recognition
Sunil Mehta is non-executive chairman at Yes Bank. He also headed Project Sashkat, which was formed under his chairmanship to help plan out a strategy for resolution of stressed assets. He is also the Chairman and Managing Director of SPM Capital Advisers Pvt. Ltd.
He has over three and a half decades of proven leadership experience in banking, financial services, insurance and investments with Citibank and AIG. In 2013, he left AIG where he was the Country Head & CEO for AIG India since 2000. Subsequently, he started SPM Capital Advisers Pvt. Ltd. As Country Head & CEO for AIG in India, He was responsible for all AIG businesses in India covering Insurance, Financial Services, Real Estate and Investments amongst other businesses. He set up AIG’s insurance JVs with Tatas and was also responsible for expanding AIG’s presence across ten businesses in India which included Life & Non-Life Insurance, Private Equity, Asset Management, Real Estate, Home Finance, Consumer Finance, Software Development, Mortgage Guaranty and Aircraft Leasing. He was on the Board of all AIG Companies in India and on the Board of IDFC Ltd. for several years.
Prior to joining AIG, Mr. Mehta worked with Citibank for over 18 years where he held various senior positions. He was asked to Chair the Committee on Resolution of Stressed Assets by the Honorable Finance Minister of India. He is closely engaged with various Think Tanks and Chambers of Commerce. He is the founding Board Member of the Asia Society India Centre and a Past Chairman of American Chamber of Commerce (AMCHAM India) and is currently on the India Advisory Board of US India Strategic Partnership Forum (USISPF). He is actively engaged with The United Way and on the Boards of United Way India and Mumbai. He was also the Chairman of both these organizations and also member of the Global Transition Board of United Way Worldwide.
VCC Events opens up the avenues for participation. Join hands to be a part of India’s largest gathering of alternative investments leaders, industry stakeholders and Asia’s influential limited partners, general partners and marquee advisors. Your chance to actively participate and augment yourself as thought leaders.
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