Business Today 14th January 2018 - Page 22

THE BUZZ HEALTHCARE INSOLVENCY CODE HOSPITALS FOR SELF-POLICING ENTERPRISE VALUE ROW Bankers and prospective RECENT interventions by Central and state governments have put pressure on private hospitals to come out with self-regulatory norms to strengthen doctor- patient trust by bringing in transparency in the quality of treatment, essentiality of diagnostic tests and the rationality of hospital bills. The private healthcare industry has expressed hope that the self-regulation code, prepared by the Indian Medical Association, will deter the government from creating an institu- tional mechanism they dread most — a legally-binding regulatory framework to monitor the functioning of hospitals. It’s been seven years since the Centre enacted The Clinical Establishments (Registration and Regulation) Act, 2010. The implementation by states has been sketchy at best. It has taken a series of ill-thought-out reactions by the Centre and state governments against alleged overcharging and medical negligence by some private hospitals for the industry to suggest an alternative mechanism now. - Joe C Mathew bidders of distressed assets are slugging it out over the valuation of businesses under the bankruptcy code. There is a provision for providing only ‘liquidation value’ under the code, which is a worst- case scenario, if there is no resolution. But ‘liquidation value’ has actually ended up becoming a starting point for buyers to bid. This is creating lot of anxiety in the banking community as a lower bid AUTOMOBILE A New Chapter in EV Story IN EARLY December, Tata Motors handed over the keys of the first set of the electric version of its compact sedan Tigor to EESL, a joint venture of power PSUs that is spearheading electrification of cars. Tata can supply as many as 6,000 of these cars. The numbers might go g seem small but in one g the figure measures up to Mahindra e2o's (previ- ously Reva) sales in its 15-odd years' lifespan. The government is looking to buy as many as 10,000 electric vehicles for its fleet. A leader in the hitherto uncharted territory, EESL had earlier revolutionised the LED bulb indus- try. The company believes it has the potential to replace another 4,00,000 conventional cars used by the government with electric cars in the next five years. If this succeeds, the electric car story in India would begin in right earnest. - Sumant Banerji price means higher haircuts on loans. While there is no provision for ‘enterprise value’ under the code, bankers are lobbying for a clause insertion. This would cover assets, especially in sectors such as steel and real estate, that have better value than, say, assets of an EPC business or an infrastructure player. Bankers assert that the enterprise value correctly reflects the value of the business as it takes into account debt, market capitalisation and cash on the books. – Anand Adhikari 22 I BUSINESS TODAY I January 14I 2018