One of the many strategies to deal with the problem of non-performing assets (NPA) effectively and maximising price discovery is to develop a market for distressed assets. A secondary market for NPAs can reduce the debt collection burden on banks and free up resources and capital to support new
lending and allow optimum use of assets unlocked in the process. Distressed assets investment firms are adept at generating capital from sophisticated investors to acquire stressed assets with a strategy to turnaround and enhance the value of assets. These firms have played an integral role in some of the
major corporate resuscitations around the world over the last three decades.

For an emerging economy like India, where market participants are strongly dependent on loans from banks and where the corporate bond market is under-penetrated, developing a market for distressed assets is vital. India’s stressed assets market is estimated at $115 billion. A massive amount of capital is
needed among the intermediaries in the NPA resolution process. The enactment of the Insolvency and Bankruptcy Code, 2016 (Code) has created an effective the framework for resolution of stressed assets. The Code is a work in progress legislation with concerns. Delays in resolution process and approval of
resolution plans by Adjudicating Authority continue to be a matter of concern for distressed assets investors and other stakeholders. Improvements in insolvency ecosystem are needed to create an attractive market of distressed assets. 

ILA has established the Stressed Assets Stakeholders Forum (SASF) to serve as a platform to bring
together the distressed assets funds, investors, financial institutions, fund managers, restructuring,
turnaround and other experts, and related stakeholders.