2 days ago
- Business
- New Indian Express
Banks recover Rs 3.96 lakh cr against admitted claims of Rs 12.15 lakh cr through insolvency resolution
Banks and financial creditors have taken a 67% haircut in over 1,200 cases of corporate insolvency cases that ended in resolution. The data released by Insolvency and Bankruptcy Board of India (IBBI) indicates a realisation of Rs. 3.96 lakh crore for creditors under resolution plans through June 2025 against admitted claims of Rs 12.15 lakh crore.
The fair value of these assets was estimated at Rs. 3.50 lakh crore, and the liquidation value at Rs. 2.32 lakh crore. This demonstrates that creditors realized 170.84% of the liquidation value, a key indicator of the process's effectiveness in preserving and enhancing the value of distressed assets.
According to IBBI, about 40% of the CIRPs (497 out of 1229 for which data are available), which yielded resolution plans, were earlier with BIFR and/or defunct. In these CDs, the claimants have realised 18.91% of their admitted claims and 152.42% of liquidation value.
In the April-June 2025 quarter, 60 insolvency cases were resolved with around Rs 21,000 crore claims. Against these claims, financial institutions recovered Rs 6,200 crore, or 29% of the admitted claims.
The report also sheds light on the resolution of large cases and the reasons for liquidations. As of June 2025, several large cases, defined as those with admitted claims exceeding Rs. 1000 crore, were resolved. For corporate debtors (CDs) with claims exceeding ₹1,000 crore, 177 resolved cases resulted in 33.70% recovery of admitted claims (₹10.46 lakh crore), which is 178.17% of liquidation value (₹1.98 lakh crore).
While 2,824 corporate debtors entered liquidation, the completed processes realised only 90.3% of liquidation value. Till June, 2025, 1439 CDs have been completely liquidated. These 1439 CDs together had outstanding claims of Rs.4.26 lakh crore, but the assets valued at Rs. 0.17 lakh crore Most liquidated CDs (78%) were defunct or BIFR cases with severely eroded asset value (averaging 6.13% of debt). However, 103 CDs were rescued during liquidation via going-concern sales, recovering ₹4,679 crore.
The IBBI report clarifies that around 78% of the CIRPs ending in liquidation were for companies that were either already with the Board for Industrial and Financial Reconstruction (BIFR) or were defunct before the CIRP began. The economic value in most of these corporate debtors had already been significantly eroded, with assets valued at an average of just 6.13% of the outstanding debt.
Till June 2025, 103 CDs were closed by sale as a going concern under liquidation process. These 103 CDs had claims amounting to Rs 1.6 lakh crore, as against the liquidation value of Rs. 5674 crore. The liquidators in these cases realized Rs 4679 crore and companies were rescued.
