Since the advent of the Insolvency and Bankruptcy Code in 2016, India has witnessed constant efforts aimed towards strengthening its credit ecosystem. It has been more than two years the code was enacted, with the promise of being the biggest post-independence reform in the economic sphere. The Code is considered as a monumental reform to improve ‘Ease of doing Business’ in India. It amalgamated all previous provisions to institutionalize in a time-bound manner a common law for the resolution of insolvency and reformation of corporate entities and partnership firms. It has incredibly reinforced the juridical foundation pertaining to the liquidation, reformation and revival of feeble corporate entities, which will ultimately go a long way in improving India’s ranking on the Ease of Doing Business Index. 

This article sheds light on the evident and emerging impacts of the growing insolvency code phenomena on the mergers and acquisition deals.  Further this article seeks to highlight the changes introduced by the government in the code since its inception and how these changes made the IBC even more potent, making the ground even more fertile for M&A activity.  Many of the lingering issues around the code have been tackled by the judiciary’s positive explication and the efficacious changes brought about by the parliament which have been analysed in the paper. Thus the article seeks to examine the landmark judicial interpretations in the litigation involving some of the most high profile corporations like Bhushan Steel, Essar Steel, and Jaypee Infratech.

Eventually this article seeks to shed light on the reasons as to why the Insolvency & Bankruptcy Code has not been able to perform near its full potential and the changes that can be brought so that it meets its lofty goals specifically in the light of mergers and acquisitions.  

Keywords: Financial creditors, Operational creditors, corporate insolvency restructuring process, amalgamation, takeover

 Download Full Paper