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IBC: Bargain season in India

The introduction of the insolvency and bankruptcy code, 2016 (IBC) marked a significant step towards making sure that doing business in India was easy for both investors and creditors alike. The code consolidated several previous regulations and provided teeth to stakeholders empowering them to seek time bound resolution of distressed enterprises.

So far the process can be seen to be an unqualified success, over 1200 cases have been admitted to the National Company Law Tribunal (NCLT) with around a 1000 more in the pipeline with an estimated 14 Billion dollars worth of debts having been recovered at such proceedings.

The restructuring, liquidation and other resolution mechanisms envisaged under the IBC can be looked at as a significant opportunity for strategic foreign investors to invest in the Indian market. Particularly when the asset pricing is sweetened further by a weak rupee against the dollar.

Why should foreign investors be excited about IBC cases?

The IBC process allows investors to acquire otherwise sound companies at an attractive valuation, these companies often have established value chains and are available at pricing that otherwise may not be unlocked through traditional M&A processes. It is no wonder distressed asset funds are making a beeline for the Indian market.

Given the growth of the Indian economy and the future growth potential the IBC process represents a low hanging fruit for entities looking to enter the Indian market.

To know more about how you can take part in the IBC process to acquire Indian assets contact us

 

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