Latest news with #Khetan
The Hindu
13 hours ago
- Business
- The Hindu
Is IBC an effective resolution tool?
The story so far: More than eight years have passed since the enactment of India's Insolvency and Bankruptcy Code (IBC). According to data from the Insolvency and Bankruptcy Board of India (IBBI), creditors have realised ₹3.89 lakh crore under the framework, with a recovery rate of over 32.8% against admitted claims. Why was the IBC enacted? India enacted the IBC, its first comprehensive bankruptcy law, in 2016 to improve the overall corporate insolvency resolution process. Shifting control from debtors to creditors, the IBC introduced a time-bound resolution mechanism to streamline bankruptcy proceedings, reduce judicial delays, and improve creditor recoveries. According to current provisions, a maximum timeline of 330 days is allowed to find a resolution for a company admitted into the insolvency resolution process. Otherwise, the company goes into liquidation. So far, the Code has rescued 1,194 companies through resolution plans. Is IBC a preferred route for debt recovery? As per the Reserve Bank of India report on Trend and Progress of Banking in India released in December 2024, the IBC emerged as the dominant recovery route, accounting for 48% of all recoveries made by banks followed by the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act (32%), Debt Recovery Tribunals (17%), and Lok Adalats (3%) in the Financial Year 2023-24. The realisation under IBC is more than 170.1% as against the liquidation value. Resolution plans, on average, are yielding 93.41% of the fair value of the Corporate Debtors (CDs), IBBI said. Further, 1,276 cases have been settled through appeal, review, or settlement, and 1,154 cases have been withdrawn under section 12A. The Code has referred 2,758 companies for liquidation, as per IBBI data. Nearly 10 companies are being resolved against five going into liquidation. Has IBC been an effective recovery mechanism? Akshat Khetan, Founder, AU Corporate Advisory and Legal Services, pointed out that IBC has changed the underlying credit culture. As the Supreme Court once observed, 'the defaulter's paradise is lost' and the Code has created a credible threat that ensures timely repayment. On the recovery rate of 32.8%, Mr. Khetan pointed out that it must be interpreted in light of the distressed nature of the assets that come into the IBC process, often after years of erosion. As the National Company Law Appellate Tribunal has rightly remarked in one of its rulings, 'IBC is not a recovery mechanism; it is a resolution framework.' Compared to legacy systems, where recovery rates were often below 20% with timelines extending into decades, a 32.8% realisation is a leap forward, he said. Mr. Khetan also stated that the statistic does not capture qualitative gains, such as job preservation, improved enterprise value, and restored investor confidence. In a framework designed to balance resolution over liquidation, the broader economic impact of IBC far outweighs numerical recovery alone, he said. The provisions of the IBC have prompted debtors to take early action in distress situations, marking a shift in their behaviour. National Company Law Tribunal (NCLT) data show that 30,310 cases were settled prior to admission, covering underlying defaults worth ₹13.78 lakh crore till December 2024. A study by the Indian Institute of Management, Bangalore, submitted to IBBI, said IBC has injected discipline in the credit allocation process and has prompted borrowers to adhere to stipulated payment schedules. The gross non-performing assets of the scheduled commercial banks have declined from a peak of 11.2% in March 2018 to 2.8% in March 2024. A part of that reduction is attributable to resolution processes enabled under IBC, it said. The study also indicated a 3% reduction in the cost of debt for distressed firms post-IBC, compared to non-distressed firms , indicating an improved credit environment for distressed firms. The IBC has had a positive impact on corporate governance, reflected in the increased proportion of independent directors on the boards of companies resolved under the Code. What are the major challenges? In a recent report, India Ratings and Research said that judicial delays and post-resolution uncertainties continue to affect confidence in the IBC framework. Even when resolution applicants are ready and the Committee of Creditors has granted approval, delays at the NCLT continue to push recovery timelines. In several cases, such delays result in extended litigation or failed implementation, increasing the risk of liquidation for a viable asset that requires timely execution, it said. The future insolvencies also raise questions about the Code's readiness to handle non-traditional enterprise defaults. While the IBC is legally broad enough to accommodate various resolution strategies, key commercial elements such as intellectual property valuation, treatment of employee dues, and tech continuity require a clearer treatment under the framework to make it future-ready, India Ratings said. To enhance its effectiveness, India must invest in strengthening tribunal infrastructure, allow for pre-packaged insolvency, and establish jurisprudential guardrails to protect bona fide commercial decisions from post-resolution uncertainty, Mr. Khetan said. While challenges persist, including process delays and recovery rates below expectations, the Code's foundational structure remains sound. As implementation matures and jurisprudence evolves, the IBC is well-positioned to overcome these hurdles and fully realise its transformative potential in India's financial ecosystem, IBBI Chairman Ravi Mital said in the recent quarterly newsletter. Does the SC verdict on Bhushan Steel pose a challenge to IBC? The recent developments in the Bhushan Power and Steel Ltd. case have reignited concerns around the finality of resolution outcomes and the predictability of the framework. While the decision upholds compliance standards, its timing and implications highlight the need for judicial clarity and faster adjudication to sustain investor confidence in the process in the long term, India Ratings said. By questioning a transaction that had been closed and operational for years, it risks unsettling the core principle of commercial certainty. If resolution applicants fear judicial reversals even after significant investment, they may hesitate to bid, undermining the IBC's very purpose. The Bhushan verdict thus underscores the need for legal sanctity once a resolution plan is approved and implemented, Mr. Khetan said. The IBC is not merely a piece of economic legislation, it is the backbone of India's credit ecosystem. Its future lies in striking a fine balance between judicial oversight and economic pragmatism. As India aspires to become a $5 trillion economy, robust and predictable insolvency mechanisms are indispensable. The Code must remain nimble, continually evolving to meet emerging realities while ensuring that commercial wisdom is not second-guessed endlessly, he said. Almost 78% of the ongoing Corporate Insolvency Resolution Process (CIRP) cases have exceeded 270 days, post-admission by the NCLT, as on March 31, 2025, ratings agency ICRA said. A sustained momentum would be needed to minimise haircuts for lenders, which remain high at 67%, it said. Nevertheless, some of the recent judgments reinforce the need for timely and transparent resolution, thereby putting greater onus on the Committee of Creditors (CoC) and NCLT. However, such rulings may also impact investor confidence in stressed assets setting precedents that the decision made by the CoC and the NCLT may be challenged and overturned by the judicial system, thus impacting the effectiveness of the resolution process, ICRA said.
Time of India
3 days ago
- Business
- Time of India
No product, no pitch, just buzzwords: Indian-origin UC Berkeley grad claims he tricked VCs with fake startup idea
NEW DELHI: An Indian-origin UC Berkeley graduate has sparked a debate about the startup funding ecosystem after claiming he received responses from 27 venture capitalists—four of whom asked for a meeting—by posing as a fake founder with no real product or pitch, but with the right mix of elite buzzwords. Bhavye Khetan, who earned a bachelor's degree in Operations Research and Computer Science from the University of California, Berkeley , said he cold-emailed 34 VCs while pretending to be a founder. In a widely shared post on X, he wrote, 'I made a fake founder persona. No product. No pitch. No deck. Just: Stanford CS, Ex-Palantir, and used the word 'AI' 3 times. Sent cold emails to 34 VCs. 27 replied. 4 asked for a call. This game is rigged in ways most people don't understand. ' — bhavye_khetan (@bhavye_khetan) The post went viral, amassing over 1.2 million views and 22,000 likes, as it resonated with users frustrated by what they see as superficial filters in the venture capital world. Khetan suggested that investor interest is often driven more by pedigree and jargon than by substance. His experiment, he said, showed that what catches the attention of investors isn't always a solid business plan or innovation. 'Who would have thought having shiny logos on resume makes people more likely to wanna talk to you,' one user responded. Khetan's critique adds to ongoing concerns about how early-stage startups are evaluated and the role of branding over actual potential. The incident also sheds light on how tech and venture capital ecosystems can sometimes favour image over idea. Responding to Khetan's post, a user on X said, "Your point may be valid, but your example is useless. 1. People complain VCs don't take cold inbound. So don't complain if they try to. 2. Most VCs take thousands of meetings a year. Taking a meeting isn't a very big sign. 3. My guess is that a Palantir alum is good signal."
Time of India
3 days ago
- Business
- Time of India
Indian-origin Berkeley graduate sends 34 Cold emails to VCs with keywords AI, Stanford and ex-Palantir, here's what happened
Bhavye Khetan, an Indian-origin UC Berkeley graduate, sparked online debate after claiming he faked a founder persona—using buzzwords like 'Stanford,' 'Palantir,' and 'AI'—to attract 27 responses from 34 venture capitalists. (Image: X/@bhavye_khetan) An Indian-origin graduate from the prestigious University of California, Berkeley recently conducted an experiment which initiated a debate across the startup world. As part of the experiment the Indian-origin student named Bhavye Khetan posed as a fake startup founder and sent some cold emails to 34 venture capitalists . In his proposal he used some buzzwords like " Stanford ," " AI ," and "ex-Palantir'. To his surprise 27 investors responded to his proposal and out of them four also asked for a call. Khetan shared his experience on a post on X (formerly known as Twitter) and called the startup funding as a 'rigged game'. Read Indian-origin Berkeley graduate Bhavye Khetan's viral post here Khetan shared the details of his experiment on X, highlighting how superficial markers of credibility—such as prestigious university affiliations and trendy tech terms—can generate investor interest, even without a product, pitch, or business plan. 'I made a fake founder persona. No product. No pitch. No deck. Just: by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 5 Books Warren Buffett Wants You to Read In 2025 Blinkist: Warren Buffett's Reading List Undo - Stanford CS - Ex-Palantir - Used the word 'AI' 3 times Sent cold emails to 34 VCs. 27 replied. 4 asked for a call. This game is rigged in ways most people don't understand,' wrote Khetan in the viral post. Khetan's findings suggest that VCs may be heavily influenced by signals of perceived credibility and alignment with current investment trends, sometimes even over the substantive details of a business idea. The inclusion of "AI" taps into the current technological zeitgeist, while "Stanford" and "ex-Palantir" (referring to the data analytics company co-founded by Peter Thiel, a prominent VC) signal an elite educational background and experience at a high-profile, data-driven firm. His post, which has garnered over 1.2 million views, critiques the venture capital ecosystem, suggesting that flashy credentials often outweigh substance in early-stage funding decisions.
News18
3 days ago
- Business
- News18
UC Berkeley Alumnus Creates ‘Fake Persona' To Fool 34 VPs. Then This Happened
Last Updated: A UC Berkeley grad of Indian origin said he got replies from 27 venture capitalists by posing as a fake persona and using popular buzzwords. There's no denying that big-name schools and impressive logos can make a resume stand out. Bhavye Khetan, an Indian-origin graduate from UC Berkeley, surprisingly proved this. He created a fake persona and used buzzwords like 'Stanford," 'AI," and 'Palantir" in cold emails—and ended up getting attention from nearly 30 venture capitalists. His experiment shows just how much weight fancy names and popular terms still carry in the professional world. On X (formerly Twitter), Khetan aimed at the startup and venture capital scene, questioning its obsession with appearances. He noted that just using impressive names and trendy buzzwords was enough to spark interest, even without a concrete idea or business plan. The post has already crossed 1.2 million views and quickly went viral, igniting a wave of debate across social media. A user wrote, 'I heard about a guy who faked his CV with/ similar founder, tech nonsense & landed major consulting & then executive jobs this way. The entire climb up the ladder, he delegated key tasks he had no idea how to do himself to underlings. Now he's CFO at a Fortune 500, clearing 500K a year." Another said, 'This is stupid. You lied. Stanford is meaningful. Palantir is meaningful. AI is meaningful. The only person acting inappropriately is you." 'I don't think it's rigged, if you lie, of course, they will take your call, but I think you won't get past that when they figure out you are lying pretty quickly," an individual commented on X. 'It doesn't stop there. Some of these founders only consider candidates who graduated from elite universities. We've received specific requests for sales positions where graduating from a top-tier school is a non-negotiable requirement. Candidates from other schools won't even be considered, regardless of work history. I get it if you're hiring for an entry-level role. But once people have some WE, it's a mistake," another user remarked. The post has since continued to fuel conversations about credibility, ethics, and what truly matters in the startup world.
Time of India
3 days ago
- Business
- Time of India
Indian-origin Berkeley graduate claims he fooled investors. He has no product, no pitch
Indian-origin UC Berkeley graduate says he fooled investors by just dropping Stanford's name. Bhavye Khetan, an Indian-origin UC Berkeley graduate claimed on his social media that he fooled investors by dropping fancy words and big names of universities and got responses from them, while he has no product, no pitch and no deck. He just created a fake creator profile, Khetan claimed and his post went viral. His LinkedIn profile claimed that he studied a Bachelor's degree at Berkeley, while his work experience includes a position in New Delhi. He also called himself the founder of a card that apparently combines multiple credit cards. Khetan claimed that he made a fake founder persona who studied Computer Science at Stanford, worked at Palantir. He said he sent cold emails to 34 VCs and 27 among them replied. Four asked for a call, the Indian-origin graduate wrote, concluding that the game is rigged in ways most people don't understand. — bhavye_khetan (@bhavye_khetan) Social media users slammed him for shaming the investors and pointed out that taking meetings is not a big deal as venture capitalists take thousands of meetings a year and Stanford and Palantir are good names. "Yeah, and Americans don't even realize how degree of how much easier it is for them to secure funding or even just a client compared to euro/indian/asian folks," one wrote. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Buy Brass Idols - Handmade Brass Statues for Home & Gifting Luxeartisanship Buy Now Undo "This is stupid. You lied. Stanford is meaningful. Palantir is meaningful. AI is meaningful. The only person acting inappropriately is you," another wrote, "I don't think it's rigged, if you lie of course they will take your call but I think you won't get past that when they figure out you are lying pretty quickly," a third user wrote. The viral post comes amid a major H-1B row with US tech workers claiming that companies are downsizing to accommodate the hirings from foreign countries whom they pay less.
