Singapore can become major investor in India's stressed assets, says envoy

A large part of existing investment is Singapore's government linked funds and private equity funds in India.

Singapore: Singapore, as an Asian economic hub, could potentially become a leading investor in India's stressed assets, especially in the financial sector, building on its strong investment-linked relationships, India's envoy here Jawed Ashraf said on Thursday.

Ashraf was addressing some 200 investors and business leaders at the conference on India's Insolvency and Bankruptcy Code (IBC) and long-term impact on India's stressed assets, which some estimates value it at USD 250 billion in the banking sector.

A large part of Singapore's investment from Singapore's government linked funds and private equity funds in India has been in existing or mature assets, and we see a huge potential for investments in stressed assets, as many are viable companies that have had management issues that forced them into a situation that triggered process for resolution under the Insolvency and Bankruptcy Code, Ashraf said.

Highlighting the background, key provisions and the benefits of the IBC, the Indian High Commissioner said, many of the assets would be available at attractive price and the process of resolution is very quick, averaging about 300 days per case.

Ashraf believes that the Singapore eco-system will also be very supportive of opening an entirely new chapter and take the two countries' investment relations to a new level.

Ashraf assured that the IBC will continue to get improved, which will see the investment cycle picking up especially with the participation of the private sector.

Sunil Sanghai, chairman of the National Committee on Capital Markets in the Federation of Indian Chambers of Commerce and Industry, said, there is a proper and very structured regulatory framework which has been put in place which is not only helping assets to get restructured but also investors to take investment decision for participating in the stressed assets.

The framework through IBC allows investors, including foreign investors, to participate in the stressed assets, he pointed out.

There is also a proactive approach for the bankers and lenders to offer assets before they are declared stressed and heads for bankruptcy.

If there are signs of stress well before bankruptcy, the bankers and lenders can start inviting investors and look at restructuring which give a new opportunity for investors, Sanghai, who is also founder and CEO of NovaDhruva Capital Pvt Ltd, said.

He also highlighted that it is first time that various regulators, policy makers and banks are trying to find different solutions such as the Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (INVITs) which are listed on the capital market and are alternative sources for resources.

He underlined the collective will led by the government, banks and capital market to resolve the stressed asset, saying these efforts were convincing foreign investors to participate in India's stressed assets.

The two-day conference includes one-to-one investor meetings in Singapore on Thursday and Friday.

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