M.S. Sahoo, Chairperson, Insolvency and Bankruptcy Board of India (IBBI) on Thursday said that the market for distressed assets in India is vast and will increase in days to come and there cannot be a better time than the present one for making investments in these.

Speaking at the FICCI-IBBI-HCI Singapore Conference on IBC (Insolvency and Bankruptcy Code), Sahoo said, "The stressed assets market will increase as the Indian economy, which is huge, is likely to grow more than 7% over the next two decades, with simultaneous increase in innovation, competition, credit market and credit growth."

He further added, "Given the future potential of the Indian economy, it is a great opportunity as far as investors are concerned and, therefore, those seriously thinking about investment in India, there cannot be a better time than the present one when distressed assets are available through the Code (IBC)."

On the issue of haircut, Sahoo said that the criticism about haircut is unfounded as it still provides a bonus when compared to the liquidation value of the firm and that it has been seen to decline over time in every other jurisdiction.

Sahoo highlighted that there has been significant improvement in the credit behaviour of the corporates as repayment of debt is no longer an option but an obligation. The fear of CIRP(insolvency resolution) permanently taking away the control and management of the firm from existing promoters deters them from committing a default.

Jawed Ashraf, High Commissioner of India in Singapore said that India has had a successful partnership with Singapore and with the strong reform agenda of the government, investment cycle is bound to strengthen further. Further, he said the IBC resolution process presents attractive investment opportunities for Singapore-based companies.

Sunil Mehta, Chairman, Indian Banks? Association and MD & CEO, Punjab National Bankillustrated the paradigm shift that IBC has generated. He added that NPAs are not just the problem of banks anymore, corporate debtors are equally concerned. "IBBI has been very open in changing the provisions, where required. This is the most commendable law for banks and a robust banking system would propel the economy," he added.

G.K. Singh, Joint Secretary, Ministry of Corporate Affairs said that the progress under the Code has been outstanding. Bankruptcy court's (NCLT) infrastructure is being strengthened and for continuous improvement, the ministry's Insolvency Law Committee has been made a Standing Committee with representation of stakeholders to fine tune policy decisions. It was further announced that the cross-border insolvency and individual insolvency are under consideration.

The Conference was organised as part of the Roadshow on 'Insolvency and Bankruptcy Code of India - New Paradigm for Stressed Assets' in Singapore (6th -7th June 2019).