Only 17% yielded a resolution plan with the remaining circumstances withdrawn publish National Company Law Tribunal (NCLT) admission as on March 31, and liquidation for 960 company debtors had been accomplished the place collectors realised only 4% of their whole admitted claims under the Insolvency and Bankruptcy Code (IBC), ICRA mentioned in a research.
The NCLT accepted a report 269 resolution plans under the IBC in FY24, surpassing FY23 report of 189 circumstances, however the rise in common period of the resolution course of has brought on worries, ICRA mentioned.
Creditor claims of ₹1.7 lakh crore had been resolved by means of resolution plan approvals in FY24 towards ₹1.5 lakh crore in FY23 and haircut by lenders rose to 73% from 64%, it added.
Average period to shut Corporate Insolvency Resolution Process (CIRP) rose to 843 days in FY24. The quantity of CIRPs closed by means of liquidation orders continued to outpace these yielding a resolution plan, ICRA mentioned.
Abhishek Dafria, Group Head, Structured Finance Ratings at ICRA,mentioned, “We continue to find creditors approaching the NCLT to admit a defaulting debtor with substantial delays, which results in significant erosion of assets. Further, there is an acute difficulty in closing the CIRPs in a time-bound manner, on account of litigations by the promoters or dissenting creditors as well as overburdened NCLT benches.”
In addition to the CIRPs, the NCLT additionally handed liquidation orders for 446 company debtors in FY24 towards 400 company debtors in FY23. The quantity of CIRPs which have resulted in liquidation continues to be considerably excessive at 45% of the 5,467 closed CIRPs, because the inception of IBC, ICRA mentioned.
