FINANCIAL DISTRESS SCENARIO IN INDIA: RECENT PATTERNS AMONG VARIOUS LISTED FIRMS

Abstract

Using financial statements of various listed firms, this study examines various types of patterns among financial distress companies in India. The study investigated financial distress patterns among various firms registered under both Board for industrial and financial reconstruction (BIFR) and Insolvency & Bankruptcy Code (IBC), 2016 by sector, ownership, and firm life cycle stage from 2006 to 2018. The study found textile, steel, edible oil and paper among major sectors faced financial distress in the past decade. Maximum percentage of firms registered with both BIFR and IBC were either  widely held or family held firms and were into the maturity stage of their firm life cycle. It was also found that firms in the industries like Mining and Quarrying, Food Products and Beverages, Sugar, Services, Telecommunication and Real Estate are facing further distress. The result of the study will benefit regulators, lenders and investors in their decision making process.