The Insolvency and Bankruptcy Code (IBC or Code) is considered as one of the most effective reforms brought in with the potential of transparently and expeditiously resolving India’s overwhelming non-performing assets (NPAs) conundrum. The Code seems to be an effective and time-bound mechanism for dealing with the problem of ever-escalating non-performing assets (NPAs) and providing our banking system some much needed respite.
IBC has also driven massive M&A momentum in the country; several domestic and international investors (including private equity firms) have been actively participating, given the opportunity to acquire valuable assets at attractive prices added with the prospect of generating higher returns.
With a strict 180+90 days ‘resolve-or-liquidate’ diktat, the Code has received commendation, not only from the Indian Industry, but from the global fraternity, including The World Bank and IMF, and has materially contributed to India’s 30 place jump in 2018’s ‘Ease of Doing Business’ ranking. IBC truly enforces the concept of ‘creditor in control’ instead of ‘debtor in possession’, and maximises value recovery potential corporate debtors.
Through this report, we have attempted to highlights the perspectives of different stakeholders, on the progress made by the Code, challenges faced and impediments that merit further attention. The report is also backed by a detailed survey of key stakeholders, who have shared their experiences.
Private Equity and Deals Leader, PwC India
“Over the year, many studies have shown that winning a bid to an asset, is not the end, but just a start to the end of creating value. Studies also show that not many deals actually create value. It has become more important that a company’s M&A strategy and integration plan are in sync with the disruptive business models and the changing mechanics of value creation-like shifting customer demands, interaction models and the economic logic for transacting.”