A study on impact of IBC

Vamsi Krishna Gunturu and Qambar Abidi

MPRA Paper from University Library of Munich, Germany

Abstract: In the year 2016, the Indian government introduced a new Insolvency and Bankruptcy Code that would not only strengthen the creditor rights but also expedite the process in under 330 days. The new law is expected to increase the confidence of the investors. This study is important because it addresses the literature gap on how strengthening creditor rights impact the investor in the stock market. Previously many laws were passed like RDDBFSI & SARFAESI act but they failed to make an impact due to frail bureaucratic and judicial procedures, and these laws were not exactly favoring the creditors. So, with IBC it is a paradigm shift from debtor supporting laws to creditor supporting laws. In this study, we have addressed the gap in the literature by doing an event study on tan the first-ever event of Bankruptcy under the new law, i.e., Essar Steel to study the impact of strengthening creditors' rights has on the Stock market of the country.

Keywords: Bankruptcy; IBC; Event Study (search for similar items in EconPapers)
JEL-codes: G10 (search for similar items in EconPapers)
Date: 2023-03-29
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