Creditors realisation stands at over 32.8% till March 2025 under bankruptcy framework: IBBI

Creditors have realised ₹3.89 lakh crore from resolution plans till March 2025, under India’s Insolvency and Bankruptcy Code (IBC) enacted in the year 2016.

The realisation is more than 32.8% as against the admitted claims and more than 170.1% as against the liquidation value, insolvency regulator Insolvency & Bankruptcy Board of India (IBBI) said in its January-March 2025 quarterly newsletter.

Resolution plans on average are yielding 93.41% of fair value of the Corporate Debtors (CDs), it said.

More than eight years have passed since the enactment of the IBC in the year 2016. The Code has rescued 1,194 CDs through resolution plans. Further, 1,276 cases have been settled through appeal, review or settlement, and 1,154 cases have been withdrawn under section 12A. The Code has referred 2,758 CDs for liquidation, IBBI said.

Till March, 2025, 1,374 CDs have been completely liquidated with submission of the final report. Out of the 1,374 CDs, 878 have been closed. In the closed liquidations, the creditors have realised ₹9,330 crore, which is nearly 90% realisation as against the liquidation value, as per the data.

As a result of the behavioural change effectuated by IBC, thousands of debtors are settling their dues before the start of insolvency proceedings, IBBI said.

About 30,310 cases having underlying default worth ₹13.78 lakh crore have been settled pre-admission. Post admission, the IBC has resolved 1194 cases through resolution plans, 2,430 cases have been closed through settlement, withdrawals and appeal, and 878 liquidations have closed, it said.

In 2017-18, for every 1 CD resolved, 5 CDs would go into liquidation. Steadily, this ratio has now improved to nearly 10 CDs being resolved against 5 CDs going to liquidation, IBBI said.

Last 3 years have witnessed an unprecedented surge in the approval of resolution plans under the IBC. In 2024-25, 259 resolution plans were approved, 263 were approved in 2023-24 and 186 plans were approved in 2022-2023.

“While challenges persist, including process delays and recovery rates below expectations, the Code’s foundational structure remains sound. As implementation matures and jurisprudence evolves, the IBC is well-positioned to overcome these hurdles and fully realize its transformative potential in India’s financial ecosystem,” IBBI Chairman Ravi Mital said in the newsletter.