{"id":97384,"date":"2023-03-27T11:10:00","date_gmt":"2023-03-27T05:40:00","guid":{"rendered":"https:\/\/tradebrains.in\/features\/?p=97384"},"modified":"2023-03-27T10:49:46","modified_gmt":"2023-03-27T05:19:46","slug":"biz-insolvency-resolution","status":"publish","type":"post","link":"https:\/\/tradebrains.in\/features\/biz-insolvency-resolution\/","title":{"rendered":"Only 15%insolvency cases reach resolution during Oct-Dec 2022; recover 27% of claimed amount"},"content":{"rendered":"<div class=\"trade-content_2\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-1502790860\"><p><a href=\"https:\/\/tradebrains.in\/get\/telegram\/\"><img decoding=\"async\" class=\"alignnone wp-image-101992\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2023\/01\/telegram-channel-300x119.png\" alt=\"\" width=\"148\" height=\"59\" \/><\/a> <a href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN3Epgswxc--Aw?hl=en-IN&amp;gl=IN&amp;ceid=IN%3Aen\"><img decoding=\"async\" class=\"alignnone wp-image-123430\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png\" alt=\"follow-on-google-news\" width=\"222\" height=\"61\" srcset=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png 300w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-150x41.png 150w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news.png 468w\" sizes=\"(max-width: 222px) 100vw, 222px\" \/><\/a><\/p>\n<\/div><p>Only 15 per cent of the 267 insolvency cases admitted in company law tribunals during October-December 2022 reached resolution with overall recovery of just 27 per cent of claimed amount, the IBBI data showed.<\/p><div class=\"trade-content_7\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-2235114062\"><!-- Composite Start --> \r\n <div id=\"M923760ScriptRootC1549812\"> \r\n <\/div> \r\n <script src=\"https:\/\/jsc.mgid.com\/t\/r\/tradebrains.in.1549812.js\" async> \r\n <\/script> \r\n <!-- Composite End --><\/div><p>As much as 45 per cent cases were concluded through liquidation, according to a Kotak Securities analysis of the latest data from the Insolvency and Bankruptcy Board of India (IBBI).<\/p><p>On quarter-on-quarter basis, the second quarter of FY23 saw 256 cases in NCLTs (National Company Law Tribunals), massively down from the yearly run-rate of 2,000 cases in FY20.<\/p><p>According to the analysis, one-third of all liquidations happened because no resolution plans were received. Of the 1,901 cases resolved so far, in 1,229 cases the banker decided to go in for a liquidation, while in 600 cases, no resolution plans were received.<\/p><div class=\"trade-content_5\" id=\"trade-2439402832\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_2_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"7925020301\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div><p>In 56 cases, the resolution plan was rejected for non-compliance and in the remaining 16 cases, the debtor contravened provisions of the resolution plan.<\/p><p>Also most cases (76 per cent) that ended up in liquidation were either non-functional and\/or part of past BIFR (Board for Industrial and Financial Reconstruction) process and the rest were due to other reasons.<\/p><p>The brokerage, however, considers the low admissions and resolution levels as signs of corporate India being comfortably placed and observes that as a result the direction of cases and outstanding claims will likely stay low as legacy stress gets resolved.<\/p><p>The report further said that as much as 45 per cent of 267 closed cases in the third quarter were concluded via liquidation, while only 15 per cent cases were resolved with an average haircut of 73 per cent on admitted claims.<\/p><p>Also, the time taken to resolve is still high but is coming down from peak levels seen in Q2 of FY21, which was the pandemic year.<\/p><p>As of Q3, about 64 per cent of the ongoing cases have crossed 270 days since admission, another 14 per cent crossed 180 days. Given this delay, the number of cases facing liquidation is likely to stay high, warned the report, adding the average resolution duration is 590 days.<\/p><div class=\"trade-content-10\" id=\"trade-2386895056\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_3_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"2969612066\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div><p>Another trend is that operational creditors are leading new case admissions now with as much as 50 per cent cases were initiated by operational creditors and 40 per cent by financial creditors during the reporting quarter.<\/p><p>Of the total admitted cases in Q3, nearly half (42 per cent) are from the manufacturing space, 18 per cent from real estate, 13 per cent from retail\/ wholesale trade and 7 per cent from construction. And this shows that corporate India continues to be in a healthy shape with no new signs of stress, especially from the large companies, which dominated the initial years of the IBC process.<\/p><p>But the report has warned that a significant proportion of new cases will be coming in from borrowers in the mid and small enterprise segments, which were impacted by the pandemic.<\/p><p>The total amount of debt resolved through the IBC stands at Rs 8.3 lakh crore now and overall financial creditors have so far taken a haircut of 73 per cent on admitted claims, while the amount yielded on resolution as a percentage of liquidation value is 160 per cent.<\/p><p>Also, creditors have filed claims worth Rs 1.1 lakh crore from personal guarantors. PTI BEN HVA<\/p><div class=\"trade-after-content\" id=\"trade-2290533476\"><div id=\"taboola-below-article-thumbnails\"><\/div>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({\r\n    mode: 'alternating-thumbnails-a',\r\n    container: 'taboola-below-article-thumbnails',\r\n    placement: 'Below Article Thumbnails',\r\n    target_type: 'mix'\r\n  });\r\n<\/script>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({flush: true});\r\n<\/script><\/div>","protected":false},"excerpt":{"rendered":"<p>Only 15 per cent of the 267 insolvency cases admitted in company law tribunals during October-December 2022 reached resolution with overall recovery of just 27 per cent of claimed amount, the IBBI data showed. As much as 45 per cent cases were concluded through liquidation, according to a Kotak Securities analysis of the latest data [&hellip;]<\/p>\n","protected":false},"author":13,"featured_media":46907,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1697,31],"tags":[],"class_list":["post-97384","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.5 (Yoast SEO v25.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Only 15%insolvency cases reach resolution during Oct-Dec 2022; recover 27% of claimed amount - Trade Brains Features<\/title>\n<meta name=\"description\" content=\"Only 15 per cent of the 267 insolvency cases admitted in company law tribunals during October-December 2022 reached resolution with overall recovery of just 27 per cent of claimed amount, the IBBI data showed.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tradebrains.in\/features\/biz-insolvency-resolution\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Only 15%insolvency cases reach resolution during Oct-Dec 2022; 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