FINOMICS 2019- Insolvency: The End or a New Beginning?

FINOMICS 2019- Insolvency: The End or a New Beginning?

X-FIN, the Finance Association of XIMB organized their annual business conclave ‘FINOMICS’ on 25th August 2019. The theme of the discussion was "Insolvency: The End or a New Beginning?"

CA Vishal Jain, Insolvency Professional, Proprietor of Vishal G. Jain and Associates, Mr. Uday Patil, Director, Investment Banking, Keynote Corporate Services Limited, Mr. Somjeet Behera, Deputy VP, RBL Bank, and Mr. Debasis Panigrahi, Executive Director, Nomura India Investment Banking were the esteemed speakers of the occasion. Professor D. V. Ramana, Professor of Accounting, Xavier Institute of Management, Bhubaneswar, served as the moderator for the discussion. 

Finomics

The dignitaries inaugurated the event by lighting the ceremonial lamp. Professor D. V. Ramana started the session by briefly elucidating on the topic.

The first speaker, CA Vishal Jain, talked about the importance of Insolvency and Bankruptcy Code (IBC) and how such a sound legal framework will reduce information asymmetry and maximize value in a time-bound manner.  He emphasized on the fact that when a business fails, the best arrangement is to go through a quick negotiation.

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The second speaker, Mr. Uday 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 some 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 went on to explain 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. He concluded by saying, “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.” 

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The next speaker, Mr. Somjeet Behera, started off by terming IBC as one of the government’s ‘landmark’ policies. He explained the concept of Twin Balance Sheet problem and how IBC is solving it. He further gave insights about Tata Steel’s resolution plan and acquisition of debt-ridden Bhushan Steel in which he was directly involved. He concluded with a positive note, “IBC is a revolution which would improve India’s position in Ease of Doing Business.”  

Mr. Debasis Panigrahi was the final speaker of the day. He discussed the impact of IBC. “The time taken to resolve stressed loans has decreased from 4.3 years to 1-1.5 years after IBC implementation.” He added that similar was the case with the recovery rate which has jumped from 26% to 48%. 

The panel session was followed by an interactive question and answer section, where students posed inquisitive and insightful questions. This was followed by the launch of ‘Finshastra’, the annual magazine of X-FIN. The eminent speakers felicitated the winners of ‘Financius’, an annual intra-college article writing competition and ‘Budgewiser’, an inter-college budget analysis competition organized by X-FIN. Mr. Shivam Jolly, the student coordinator of X-FIN delivered the vote of thanks to all the dignitaries and concluded the event.

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