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Mint
28-05-2025
- Business
- Mint
Insolvency board revamps reporting of bankruptcy resolution process to ease compliance burden
New Delhi: Insolvency and Bankruptcy Board of India (IBBI) has revamped the reporting and monitoring of corporate bankruptcy proceedings to cut red tape, enable auto-population of electronic forms and ease compliance burden, showed an official order. IBBI has been taking steps to improve the efficiency of debt resolution, cut down delays, and seamlessly make information about the resolution process available to stakeholders. The government is also building a tech platform that will connect all stakeholders involved in bankruptcy resolution, including tribunals, creditors, and policymakers. The new protocols brought out on Tuesday reduce the number of forms to be filled from nine to five and will be applicable from 1 June, but there will be no penalty in the September quarter for any default in timely filing as part of a transition arrangement, the order said. As part of the changes, a new standardised monthly reporting cycle replaces the existing event-based reporting dates. In the new regime, details of various debt resolution proceedings have to be filed on or before the tenth day of the subsequent month, except in the case of approval of a resolution plan or liquidation by the tribunal, which has to be reported within seven days of such a decision. IBBI said the new forms will be made available on its website on 1 June. No penalty will be levied on delayed filing of forms, if any, during the September quarter in order to facilitate the professionals handling the bankruptcy case to familiarise themselves with the new forms and to resolve any technical issues, the regulator said. The set of forms have to be filed on an electronic platform to be hosted on the regulator's website. The consolidation of forms has been achieved by removing duplications, streamlining data requirements, and leveraging technology for auto-population of information already available on portal, IBBI stated. Rating agency Icra Ltd. said on Wednesday that since the introduction of the Insolvency and Bankruptcy Code (IBC) in 2016, 8,308 corporations have been admitted in tribunals for debt resolution, of which 61% have been resolved either through a successful resolution plan or by withdrawal of the case or by liquidation by end of March 2025. The IBC, despite its shortcomings, continues to deliver better realisations for creditors over other recovery modes, the Icra report quoted Manushree Saggar, senior vice president and group head, Structured Finance Ratings. 'Historically, resolutions from the IBC have been plagued by long resolution timeframes, high share of liquidations and sizeable haircuts. While FY25 was a positive year with improved realisations, the overall resolution time remains a cause for concern,' said Saggar. Almost 78% of the ongoing corporate insolvency resolution cases have exceeded 270 days, post admission by the National Company Law Tribunal as on 31 March, 2025, Saggar added. Some of the recent judgments reinforce the need for timely and transparent resolution, thereby putting greater onus on the Committee of Creditors (CoC) and the NCLT, Saggar said. IBC's workings recently became a subject of public debate after the Supreme Court on 2 May rejected the debt resolution plan of Bhushan Power & Steel Ltd (BPSL) that was approved by NCLT in 2019 and was upheld by an appeals tribunal in the subsequent year. However, on Monday, the apex court stayed the liquidation process and ordered status quo.
Mint
28-05-2025
- Business
- Mint
Corporate insolvency cases fall 28% to 724 in FY2025; recoveries still low: ICRA
New Delhi [India], May 28 (ANI): Fewer companies went through the insolvency process under the Insolvency and Bankruptcy Code (IBC) in financial year (FY) 2025, according to the credit rating firm ICRA. As per the ICRA, only 724 companies were admitted for insolvency, a sharp 28 per cent drop from 1,003 in the previous year. The number of approved resolution plans also dipped slightly to 259 from 263 last year. Under the IBC, introduced in 2015, authorities try to streamline the process of resolving financial distress and insolvency of companies and individuals. The IBC offers a framework for prompt and effective resolution with the dual goals of protecting creditors and encouraging entrepreneurship. In the last quarter of FY2025, lenders recovered about 70 per cent of the admitted claims in some cases, registering the highest levels so far, said the ICRA. However, ICRA noted that recoveries still remain low overall, with lenders facing a 67 per cent haircut on average. Since IBC began in 2016, a total of 8,308 companies have entered the process. About 61 per cent of these cases have been resolved, but the actual recovery through successful resolution plans remains low at just 33 per cent. Manushree Saggar, Senior Vice President and Group Head, Structured Finance Ratings, at ICRA, said: "Historically, resolutions from the IBC have been plagued by long resolution timeframes, a high share of liquidations and sizeable haircuts. While FY2025 was a positive with improved realisations, the overall resolution time remains a cause for concern." He further added, "Almost 78 per cent of the ongoing CIRP cases have exceeded 270 days post admission by the NCLT, as of March 31, 2025. Nevertheless, some of the recent judgements reinforce the need for timely and transparent resolution, thereby putting greater onus on the Committee of Creditors (CoC) and NCLT." Empirical data suggests that recoveries in the case of successful resolution plans (33 per cent recovery) have been liquidation (4 per cent recovery). This supported the higher recoveries in Q4 FY2025, as resolutions outpaced liquidation orders during this period. The record recovery in Q4 FY2025 was led by a few large cases (admitted claims > ₹ 1,000 crore) where a 77 per cent recovery was achieved against the admitted claims. These large cases had a 90 per cent share in recovery but only a 10 per cent share in approved resolution plans. Thus, ICRA believes that improvement in recovery of large cases would be critical to the overall success of the code. The firm added that to improve the efficiency of NCLT, which usually gets blocked in the resolution of small-value cases, a focus on the special mechanism to resolve smaller cases like the Pre-packaged Insolvency Resolution Process (PPIRP) is critical, though it has seen limited success so far. It further added that while the ratio of resolution to liquidation rose to a high of 0.9 in FY2025 (1.9 in Q4 FY2025) from 0.6 in FY2024, the average resolution time worsened to 713 days as of March 31, 2025, from 679 days as of March 31, 2024, significantly higher than the deadline provided by the IBC. The credit agency said in order to improve the CIRP process, the Insolvency and Bankruptcy Board of India (IBBI) introduced amendments to the IBC code in Q4 FY2025 that will improve the efficiency of the auction process and the liquidation process. (ANI)
India Gazette
28-05-2025
- Business
- India Gazette
Corporate insolvency cases fall 28% to 724 in FY2025; recoveries still low: ICRA
New Delhi [India], May 28 (ANI): Fewer companies went through the insolvency process under the Insolvency and Bankruptcy Code (IBC) in financial year (FY) 2025, according to the credit rating firm ICRA. As per the ICRA, only 724 companies were admitted for insolvency, a sharp 28 per cent drop from 1,003 in the previous year. The number of approved resolution plans also dipped slightly to 259 from 263 last year. Under the IBC, introduced in 2015, authorities try to streamline the process of resolving financial distress and insolvency of companies and individuals. The IBC offers a framework for prompt and effective resolution with the dual goals of protecting creditors and encouraging entrepreneurship. In the last quarter of FY2025, lenders recovered about 70 per cent of the admitted claims in some cases, registering the highest levels so far, said the ICRA. However, ICRA noted that recoveries still remain low overall, with lenders facing a 67 per cent haircut on average. Since IBC began in 2016, a total of 8,308 companies have entered the process. About 61 per cent of these cases have been resolved, but the actual recovery through successful resolution plans remains low at just 33 per cent. Manushree Saggar, Senior Vice President and Group Head, Structured Finance Ratings, at ICRA, said: 'Historically, resolutions from the IBC have been plagued by long resolution timeframes, a high share of liquidations and sizeable haircuts. While FY2025 was a positive with improved realisations, the overall resolution time remains a cause for concern.' He further added, 'Almost 78 per cent of the ongoing CIRP cases have exceeded 270 days post admission by the NCLT, as of March 31, 2025. Nevertheless, some of the recent judgements reinforce the need for timely and transparent resolution, thereby putting greater onus on the Committee of Creditors (CoC) and NCLT.' Empirical data suggests that recoveries in the case of successful resolution plans (33 per cent recovery) have been liquidation (4 per cent recovery). This supported the higher recoveries in Q4 FY2025, as resolutions outpaced liquidation orders during this period. The record recovery in Q4 FY2025 was led by a few large cases (admitted claims > Rs 1,000 crore) where a 77 per cent recovery was achieved against the admitted claims. These large cases had a 90 per cent share in recovery but only a 10 per cent share in approved resolution plans. Thus, ICRA believes that improvement in recovery of large cases would be critical to the overall success of the code. The firm added that to improve the efficiency of NCLT, which usually gets blocked in the resolution of small-value cases, a focus on the special mechanism to resolve smaller cases like the Pre-packaged Insolvency Resolution Process (PPIRP) is critical, though it has seen limited success so far. It further added that while the ratio of resolution to liquidation rose to a high of 0.9 in FY2025 (1.9 in Q4 FY2025) from 0.6 in FY2024, the average resolution time worsened to 713 days as of March 31, 2025, from 679 days as of March 31, 2024, significantly higher than the deadline provided by the IBC. The credit agency said in order to improve the CIRP process, the Insolvency and Bankruptcy Board of India (IBBI) introduced amendments to the IBC code in Q4 FY2025 that will improve the efficiency of the auction process and the liquidation process. (ANI)
Time of India
28-05-2025
- Business
- Time of India
Corporate insolvency cases fall 28% to 724 in FY2025; recoveries still low: ICRA
Fewer companies went through the insolvency process under the Insolvency and Bankruptcy Code ( IBC ) in financial year (FY) 2025, according to the credit rating firm ICRA . As per the ICRA, only 724 companies were admitted for insolvency, a sharp 28 per cent drop from 1,003 in the previous year. The number of approved resolution plans also dipped slightly to 259 from 263 last year. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo Under the IBC, introduced in 2015, authorities try to streamline the process of resolving financial distress and insolvency of companies and individuals. The IBC offers a framework for prompt and effective resolution with the dual goals of protecting creditors and encouraging entrepreneurship. In the last quarter of FY2025, lenders recovered about 70 per cent of the admitted claims in some cases, registering the highest levels so far, said the ICRA. Live Events However, ICRA noted that recoveries still remain low overall, with lenders facing a 67 per cent haircut on average. Since IBC began in 2016, a total of 8,308 companies have entered the process. About 61 per cent of these cases have been resolved, but the actual recovery through successful resolution plans remains low at just 33 per cent. Manushree Saggar, Senior Vice President and Group Head, Structured Finance Ratings, at ICRA, said: "Historically, resolutions from the IBC have been plagued by long resolution timeframes, a high share of liquidations and sizeable haircuts. While FY2025 was a positive with improved realisations, the overall resolution time remains a cause for concern." He further added, "Almost 78 per cent of the ongoing CIRP cases have exceeded 270 days post admission by the NCLT, as of March 31, 2025. Nevertheless, some of the recent judgements reinforce the need for timely and transparent resolution, thereby putting greater onus on the Committee of Creditors (CoC) and NCLT." Empirical data suggests that recoveries in the case of successful resolution plans (33 per cent recovery) have been higher than liquidation (4 per cent recovery). This supported the higher recoveries in Q4 FY2025, as resolutions outpaced liquidation orders during this period. The record recovery in Q4 FY2025 was led by a few large cases (admitted claims > Rs 1,000 crore) where a 77 per cent recovery was achieved against the admitted claims. These large cases had a 90 per cent share in recovery but only a 10 per cent share in approved resolution plans. Thus, ICRA believes that improvement in recovery of large cases would be critical to the overall success of the code. The firm added that to improve the efficiency of NCLT, which usually gets blocked in the resolution of small-value cases, a focus on the special mechanism to resolve smaller cases like the Pre-packaged Insolvency Resolution Process (PPIRP) is critical, though it has seen limited success so far. It further added that while the ratio of resolution to liquidation rose to a high of 0.9 in FY2025 (1.9 in Q4 FY2025) from 0.6 in FY2024, the average resolution time worsened to 713 days as of March 31, 2025, from 679 days as of March 31, 2024, significantly higher than the deadline provided by the IBC. The credit agency said in order to improve the CIRP process, the Insolvency and Bankruptcy Board of India (IBBI) introduced amendments to the IBC code in Q4 FY2025 that will improve the efficiency of the auction process and the liquidation process.
