What investment opportunities does the Indian distressed debt market hold in store?
May 24, 2016
The level of non-performing assets in India has been increasing year on year for some time. It now sits at around $50 billion excluding around $60bn of restructured assets. Almost half of the 39 listed Indian banks have their gross non-performing assets (NPAs) sitting at more than 5% of their loan book. As a whole, the Indian banking system has around 12% of total loans categorised as stressed assets.
These NPAs are increasingly creating a burden on the Indian banking system. The Reserve Bank of India is increasingly putting pressure on banks to deal with this issue. Banks are finally acting to clean up their balance sheets. As a result, we are seeing a number of overleveraged companies with good businesses' available at discount.
In addition to this, on Thursday 12 May, the Parliament of India enacted the country’s first insolvency law – the Insolvency and Bankruptcy Code 2016. The new law aims to address several problems that plague the current system including consolidation of laws, timely resolution mechanism and improved distribution of recovery proceeds. This could turn one of the slowest insolvency regimes of any major economy into one of the fastest.
These two factors give rise to a significant opportunity for investors interested in NPAs. As a result, we’re hosting a breakfast seminar on Tuesday 7 June in London where you’ll be able to hear from our Indian market experts and panellists drawn from an Indian bank, a leading Indian servicing company and a former member of the committee who drafted India’s Bankruptcy Code.
You’ll get an insight into the Indian macro economy and an understanding of the regulatory and political landscape which will help you identify the deal opportunities.
Request a place at our ‘Investment opportunities in Indian distressed debt’ here (first come, first served!) – don’t forget to include your name, job title, company name and email address.
For any other queries in relation to this event, please contact Simin Varghese at [email protected].
