3 Ways the New Indian Bankruptcy Bill is a Game-Changing Reform
Today, India’s historic Bankruptcy Bill has been passed by the upper house of India’s Parliament, the final stage toward implementation. For over a decade, investors have cited India’s debt markets as one of its most troubling business climate issues. The lack of bond market depth, institutional over-indebtedness, and no consistent recovery mechanisms makelong-term investment unattractive. Yet, this new reform will have tremendous impact for global investors as well as the Indian economy. Institutional investors and corporations alike will see major changes to both current and prospective business engagements based on this legislation.
Here are three ways the Insolvency and Bankruptcy Code is a game-changing reform:
This bill has the potential to unlock billions in untapped pools of liquidity especially toward critical infrastructure investment in India, where long-term project liabilities need to be matched with long-term debt assets.
This new bill consolidates India’s many overlapping, inconsistent, and unenforceable laws into a clear institutional framework through which debts can be restructured. This creates a much-needed path for faster resolution of long-standing issues.
As implementation of this reform takes shape, the deal landscape will evolve rapidly. Foreign funds should now take a fresh look at both public and private market debt opportunities in India, both for interesting entry points as well as long-awaited exits.