Study added that large stressed borrowers have debt aggregating to Rs 5.4 lakh crore.

The banking system's gross non-performing assets (NPAs) may come down a notch to Rs 9.1 lakh crore by the end of current fiscal (March 31, 2020), from Rs 9.4 lakh crore as on March 31, 2019, said a joint study.

"There is significant potential opportunity for stressed-assets investors, given around Rs 9.4 lakh crore NPAs in the banking system as on March 31, 2019. Of this, the corporate segment, which has seen active interest from most investors, is estimated to account for 70 per cent," said the study titled, "Bolstering ARCs", conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) jointly with global analytics company Crisil.

It added that large stressed borrowers have debt aggregating to Rs 5.4 lakh crore, which is a huge playing field in itself for investors.

Of the total, National Company Law Tribunal (NCLT) list-1 and list-2 comprised around Rs 2.1 lakh crore and existing stock of NPAs comprised another Rs 2 lakh crore.

"Over and above this, assets of around Rs 1.3 lakh crore are estimated to be under stress but have not been recognised as NPAs, these assets could potentially slip into NPAs over the near to medium term," the study said.

Power, infrastructure and steel sectors together constitute about half of Rs 4.1 lakh crore worth stressed assets. Power sector accounts constitute the largest proportion, and resolution in this sector has not been significant, according to the study.

"The revised stressed asset framework is expected to benefit stressed power sector assets that were operational and on the verge of being referred to insolvency proceedings under IBC (estimated at Rs 1 lakh crore as on March 31, 2019)", it said.

While the Reserve Bank of India's (RBI) resolution framework and the Insolvency and Bankruptcy Code (IBC) have paved the way for attracting investors into the stressed-assets space and helped speed up resolution, ironing out issues regarding legal aspects and resolution timelines will be critical to boost investor confidence, the study suggested.

It also said that notably, regulatory changes in recent years have been aimed at putting asset reconstruction companies (ARCs) skin in the game and diversifying the potential investor base for stressed assets.

With norms for investments in ARCs and security receipts (SRs), including for foreign investors been eased and business model of ARCs becoming more capital intensive, the partnership model will be the way forward for ARCs, given the higher capital requirement.

"It could be via various routes, ranging from investment in ARCs, SRs to direct investments in stressed assets," the study concluded.