Cumulative recovery rate under insolvency resolution falls to 30.18 per cent
   Date :28-Nov-2022

Business Bureau
The cumulative recovery rate under the insolvency resolution processes of debt-ridden companies declined to 30.18 per cent at the end of the September quarter, indicating that lenders took more haircut on their exposure, shows a study. The recovery rate has fallen steeply from a peak of 43 per cent in Q1 FY20.
Of the Rs 7,90,626.2 crore claims from the financial creditors admitted by various benches of the National Company Law Tribunal (NCLT), only Rs 2,43,452.5 crore or 30.18 per cent have been recovered till the end of Q2 FY23, as per an analysis of IBBI data done by Care Ratings.
The overall recovery rate implies a haircut of around 70 per cent for the lenders.
The Insolvency and Bankruptcy Board of India (IBBI) is a key institution in implementing the Insolvency and Bankruptcy Code (IBC), which provides for market-linked and time-bound resolution of stressed assets. The cumulative recovery rate has been on a downtrend, falling from 43 per cent in Q1 FY20 and 32.9 per cent in Q4 FY22 as larger resolutions have already been executed and a significant number of liquidated cases were either Board for Industrial and Financial Reconstruction (BIFR) cases and/or defunct with high resolution time, the report said.