Brokers follow stock movements on the Bombay Stock Exchange (BSE). Economic growth is expected to face challenges, after a central bank move to ban 86 per cent of the nation’s currency. The move, aimed at rooting out black money, resulted in widespread cash shortages, consequently leaving many banks saddled with enormous bad debts. (Image Credit: PTI)

Global investors come chasing Indian distressed assets

New bankruptcy law gives off the required transparency to make deals possible

Mumbai: In India, the vultures are circling.

These vultures are investors looking for opportunities in distressed assets and bad debts. For years they had avoided investing in India, put off by a creakingly slow legal system and a labyrinthine bureaucracy.

But a new bankruptcy law and a move this month to give India’s central bank expansive powers to tackle bad debt have excited investors both here and abroad who think investing in India’s distressed market could produce double-digit returns.

“The new bankruptcy laws have been given teeth, which finally makes Indian credit markets attractive to foreign investors,” said Saleem Seddiqi, founder of Musst Investments, a family office in London. Seddiqi is creating an Indian merchant bank to invest in middle-market corporate loans.

A test of the new approach came this month, when a tribunal in New Delhi dismissed an appeal by...Read more...