Creditors recovered a third of claims in 553 resolved CIRP cases: IBBI data

IBBI says while this reflects extent of value erosion by the time a corporate debtor enters CIRP, it remains the highest among all options available to creditors for recovery

The data released by the insolvency and bankruptcy board of India shows that financial creditors have recovered 32.95 per cent of their claims in 553 corporate insolvency processes that ended up getting resolved, till September 2022. The IBBI said that this only reflects the extent of value erosion by the time the corporate debtor entered the corporate insolvency resolution process. “Yet it is the highest among all options available to creditors for recovery. Resolution plans on average are yielding 84 per cent of fair value of the corporate debtors,” the latest IBBI newsletter said.  

The insolvency regulator also said that around 23,417 till September 2022 were resolved even before admission into the corporate insolvency resolution process. These companies had an underlying default of Rs 7,31,472.77 crore. “Only a few companies, who fail to address the distress in any of earlier stages, pass through the entire resolution process,” IBBI said.

The prepackaged insolvency process for the MSMEs that was launched in August 2021 has seen only two admissions including GCCL Infrastructure & Projects Ltd in Ahmedabad and Loonland Developers Pvt. Ltd., New Delhi.