X-FIN, the Finance Association of Xavier Institute of Management, Bhubaneswar , organised its annual business conclave ‘Finomics’ on August 25 and the discussion was on “Insolvency: The end or a new beginning?”.
CA Vishal Jain, insolvency professional and Proprietor of Vishal G Jain and Associates, Uday Patil, Director, Investment Banking, Keynote Corporate Services Ltd, Somjeet Behera, Deputy V-P, RBL Bank, and Debasis Panigrahi, Executive Director, Nomura India Investment Banking, were the speakers. DV Ramana, Professor of Accounting, XIMB, was the moderator.
Jain, talked about the importance of Insolvency and Bankruptcy Code (IBC) and how a sound legal framework will reduce information asymmetry and maximise value in a time-bound manner. He emphasised that when a business fails, the best arrangement is to go through a quick negotiation.
IBC a ‘landmark’ policy
Patil talked about the historical evolution of insolvency laws in India and what lead to the formulation of the Insolvency and Bankruptcy Code. He shed light on the SARFAESI Act which provided banks and various financial institutions leeway to auction residential and commercial properties without the interference of the court. He explained strategic debt restructuring (SDR) scheme which allowed loans to be converted to equity to allow banks to take control over the company if it acquired a major stake. “The goal of IBC is not to lead the company into liquidation, but to try to find value buyers and facilitate the revival of the company,” he said.
Behera, termed IBC as one of the ‘landmark’ policies. He explained the concept of twin balance sheet and how the IBC addresses this. He gave insights about Tata Steel’s resolution plan and acquisition of debt-ridden Bhushan Steel, in which he was directly involved. He said, “IBC is a revolution which would improve India’s position in ease of doing business.”
Annual magazine launched
Panigrahi said, “The time taken to resolve stressed loans has decreased from 4.3 years to 1-1.5 years after IBC implementation.” Similar was the case with the recovery rate which has jumped from 26 per cent to 48 per cent, he said.
‘Finshastra’, the annual magazine of X-FIN, was launched. The winners of ‘Financius’, an annual intra-college article writing competition, and ‘Budgewiser’, an inter-college budget analysis competition, were felicitated.