Haircuts touch 67% under IBC as creditor recovery stays low till Sep 2025

Creditor recoveries under the Insolvency and Bankruptcy Code remained at about 33% till September 2025, with steep haircuts, long resolution timelines and a high share of older BIFR cases

Creditors took a haircut of around 67 per cent on their admitted claims on the realisation made till September 2025 under the corporate insolvency resolution process (CIRP) of the Insolvency and Bankruptcy Code (IBC), the latest data released by the insolvency regulator showed.

 

The Insolvency and Bankruptcy Board of India (IBBI) — in its latest newsletter — said that the creditors have realised ₹3.99 trillion under the resolution plans, against the total claims of ₹12.31 trillion. 

 

While the realisation for creditors has remained around 32-33 per cent under the IBC, the IBBI said, “This realisation does not include the CIRP cost, and many probable future realisations such as equity, realisation from corporate and personal guarantees, funds infused into CD, including capital expenditure by the resolution applicants, and recovery from avoidance applications.”

 

About 40 per cent of the CIRPs — 516 out of 1,268 — which yielded resolution plans, were earlier with the Board for Industrial and Financial Reconstruction (BIFR) or defunct.

 

In these cases, the claimants have realised 18.74 per cent of their admitted claims, IBBI said. 

 

Till FY25, 1,194 CIRPs had yielded resolution plans with creditors realising 32.76 per cent of their admitted claims. 

 

The processes are still grappling with delays, with 1,300 CIRPs, which have yielded resolution plans by the end of September.

 

This takes an average 603 days to conclude, barring the time excluded by the adjudicating authority.

 

So far, the 2,896 CIRPs, which have ended in orders for liquidation, took on average 518 days for conclusion. 

 

More than 47 per cent of CIRPs have been initiated by financial creditors till September 2025 and 46.3 per cent by operational creditors. 

 

However, IBBI’s analysis showed that 80 per cent of CIRPs having an underlying default of less than ₹1 crore were initiated on applications by operational creditors. And, about 80 per cent of CIRPs having an underlying default of more than ₹10 crore were initiated on applications by financial creditors. 

 

In order to reduce the burden on the adjudicating authority and bring down the IBC timelines, the proposed IBC Bill has suggested mandatory admission of an insolvency application filed by a financial creditor if a default is established and procedural requirements are met. 

 

Ravi Mital, chairperson of IBBI, in the July-September 2025 newsletter, has highlighted that in the latest review of regulations in 2023-2024, the Board received 190 comments from various stakeholders. These have been processed.

 

In 2024-25, the IBBI received 128 public comments from academics, insolvency professionals, creditor institutions, IBA and others. They are being processed.

 

“The IBBI’s regulatory philosophy exemplifies a bottom-up approach, where empirical evidence, stakeholder feedback, and practical experience inform policy evolution,” Mital said.

 

   

Details of CIRP cases as on September 30, 2025

 

Admitted	8659
Closure:
Withdrawn	1223
Closed on appeal or review or settled	1342
Resolution plans approved	1300
Liquidation orders passed	2896
Ongoing CIRP cases	1898

  Source: IBBI    

Mode of closure
Liquidation	43%
Resolved/ Appeal/	57%
Review/ Settled/
Withdrawn

  Source: IBBI