IBC cases breaching resolution timeline hit 78% in FY25: Ind-Ra report

Ind-Ra notes rising resolution timelines and lowest recovery levels since FY21 under the IBC framework, cautioning this could affect bond market deepening and investor confidence

The proportion of cases exceeding the timeline for resolutions under the Insolvency and Bankruptcy Code (IBC) reached 78 per cent in FY25, the highest since FY21, according to an analysis by India Ratings and Research (Ind-Ra).

 

“Sustained delays and uncertainty over resolution under IBC could hinder deepening of bond markets, which, besides information asymmetry, are exposed to significant losses in the event of a default by an issuer, given their unsecured nature,” said Soumyajit Niyogi, Director – Core Analytical Group, Ind-Ra. 

 

The timeline for the corporate insolvency resolution process (CIRP) has increased across the board for cases initiated by financial creditors, operational creditors and corporate debtors. The average time taken for resolution through liquidation has also been the highest since FY21, the Ind-Ra report noted. Recovery for all stakeholders has continued to decline under the liquidation process, now at the lowest levels since FY21, Ind-Ra said. 

Average Time taken for Closure of coprorate insolvency resolution process (days) has been on upward trend

              Initiated by    FY21 FY22 FY23 FY24 FY25  

Financial creditors

  463 531 613 683 723  

Operational Creditors

  458 528 632 691 724  

Corporate Debtor

  439 516 541 573 577                  

Source: IBBI newletter and Ind-RA's analysis

                             

Stakeholder wise realisation(%) shows improvement in recovery by OCs

              Initiated by    FY21 FY22 FY23 FY24 FY25  

Financial creditors

  45.3 42.7 34.2 32.4 33.2  

Operational Creditors (OCs)

  16.5 16 17.6 25.1 25.2  

Corporate Debtor

  25.3 25.5 18.3 18.2 18.1  

 

Source: IBBI newletter and Ind-RA's analysis