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Post-mortem analysis of dirty dozen companies referred by Reserve Bank of India to insolvency and bankruptcy code

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  • N. V. V. Satyanarayana Puchakayala

    (Bharathiar University)

  • Ramanujam Veluchamy

    (Bharathiar University)

Abstract

Main purpose of the present study is to know whether the dirty dozen bankrupt companies that were declared by RBI were also bankrupt companies according to Edward I Altman Z-score. Descriptive method was followed under quantitative research design using secondary source of data. Descriptive statistical measures like Mean, Standard Deviation, and Kurtosis were also used to know mean performance, consistency in performance, and degree of risk involved in terms of Z-Score and its components of each company under study. The select dirty dozen bankrupt companies were also bankrupt as per their Z-score which was found to be below the benchmark of 1.81 in case of manufacturing companies; and 1.23 in case of non-manufacturing and unlisted companies. Kurtosis of more than 2.5 indicates a very high degree of risk for investment as was observed in case of Amtek Auto, Electrosteel, Bhushan Steels, and Jaypee Infratech.

Suggested Citation

  • N. V. V. Satyanarayana Puchakayala & Ramanujam Veluchamy, 2023. "Post-mortem analysis of dirty dozen companies referred by Reserve Bank of India to insolvency and bankruptcy code," SN Business & Economics, Springer, vol. 3(4), pages 1-30, April.
    • Handle: RePEc:spr:snbeco:v:3:y:2023:i:4:d:10.1007_s43546-023-00462-z
    DOI: 10.1007/s43546-023-00462-z
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    References listed on IDEAS

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    1. M. S. Sahoo & Anuradha Guru, 2020. "Indian Insolvency Law," Vikalpa: The Journal for Decision Makers, , vol. 45(2), pages 69-78, June.
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    Cited by:

    1. N.V.V. Satyanarayana Puchakayala & Ramanujam Veluchamy, 2023. "Optimal bankruptcy regime: a literature review," Future Business Journal, Springer, vol. 9(1), pages 1-10, December.

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    More about this item

    Keywords

    Insolvency; Bankruptcy; Insolvency and bankruptcy code; Dirty Dozen companies; Altman Z-score; Kurtosis;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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