Over 65% of IBC cases have been ongoing for more than 270n days

Over 65 per cent of the ongoing corporate insolvency resolution cases have been continuing for more than 270 days as on June 30, according to data with the Insolvency and Bankruptcy Board of India. This is a notch higher than 64 per cent of ongoing cases continuing beyond 270 days in the previous quarter. 

As per the IBBI’s latest quarterly newsletter, 10 per cent of the cases have been going on for anywhere between 180 to 270 days by June 30 while 15 per cent of the resolutions have been going on for 90–180 days. Only 10 per cent of the cases have been going on for less than 90 days. 

The delay in resolution of cases under the Insolvency and Bankruptcy Code has been turning into a key concern for investors, which is expected to fast track such cases. It is expected that cases undergoing resolution under the IBC should be completed within a 270-day time period.  

In fact, the average time taken for closure of the process where a resolution plan was approved was 632 days. Those cases where liquidations were approved took on an average 462 days.  

As on June 2023, a total of 2,073 cases were ongoing for corporate insolvency resolution. In all, a total of 6,815 cases were admitted for resolution, of which resolution plans had been approved in 720 cases and liquidation orders were passed in 2120 cases. 

The data also revealed that in the April to June 2023, as many as 238 cases were admitted under corporate insolvency resolution quarter while 198 cases were resolved.  

“Till June 30, 2023, the creditors have realised Rs 2.92 lakh crore under the resolution plans. The fair value and the liquidation value of the assets available with the corporate debtor, when they entered the CIRP, was estimated at Rs 2.72 lakh crore and Rs 1.74 lakh crore respectively, as against the total claims worth Rs 9.23 lakh crore,” said the IBBI. 

The haircut for creditors relative to the fair value of assets was about 16 per cent and 68 per cent relative to their admitted claims. 

In resolution cases, the realisation to creditors was 31.82 per cent of their admitted claims, which implies a haircut of about 68 per cent.  

Also watch: Stocks to watch on August 22, 2023: Titan, L&T, Dreamfolks Services, Natco Pharma, others