Effectiveness of Corporate Debt Restructuring Mechanism in India: A Study of Select Industries

Abstract

Corporations require funds, usually raised through either equity or debt. These funds are utilized by a company to make more profit. Risk is the probability for uncontrolled loss of something of value, and is a part and parcel of every business. It is the difference between the expected and the actual, and is dependent on the internal and external factors of the business environment. If these factors are positive, companies make profit; else they suffer losses and are unable to meet their financial commitments, leading to ‘financial distress’.