Recovery From Defaulters Under Insolvency Law Up In June Quarter
The cumulative recovery from 1,005 resolved cases until June 2024 stands at Rs 3.40 lakh crore
The recovery rate from defaulters under India’s Insolvency and Bankruptcy Code (IBC) has increased to 31.12 per cent of creditors' claims in the June quarter, up from 25 per cent in the preceding three months.
Despite this rise, the rate remains marginally below the long-term average of 32.06 per cent since the IBC was introduced in late 2016.
Data from the Insolvency and Bankruptcy Board of India (IBBI) reveals that creditors realised Rs 3,935 crore from the resolution of 58 stressed companies during the June quarter. The cumulative recovery from 1,005 resolved cases until June 2024 stands at Rs 3.40 lakh crore.
The latest figures indicate that recovery during the June quarter was 84.15 per cent of the fair value of the stressed companies at the time of their admission for resolution, and 122.81 per cent of the liquidation value.
These numbers are close to the longer-term averages of 84.93 per cent for fair value and 161.17 per cent for liquidation value, suggesting an erosion in the value of stressed firms when the IBC process was initiated by creditors.
