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Fresh corporate insolvency cases fell by 83 percent during October-December in FY21

Fresh corporate insolvency cases fell by 83 percent during October-December in FY21

The number of corporate insolvency cases admitted by tribunals dropped by a sharp 83% annually in the October-December quarter, data from the Insolvency and Bankruptcy Board of India (IBBI) showed.

Fresh insolvency cases for the third quarter of FY21 stood at 104 compared to 628 for the same period of the earlier fiscal, as the now-expired suspension on initiating corporate insolvency proceedings was still in effect.

The third quarter figure represented a marginal improvement from the 84 and 95 fresh cases admitted during the first and second quarter of FY21, respectively, taking the total number of admitted cases to 4,139.

About 23 corporate insolvency cases yielded resolution plans during the quarter in consideration, resulting in a total of 317 corporate debtors (CDs) cases being rescued under the Insolvency and Bankruptcy Code (IBC) since inception.

The CDs in these 317 cases owed a total of Rs 5.5 lakh crore to creditors against Rs 2 lakh crore recovered through the resolution plans, according to the data.

While this made up for 13% of total closed corporate insolvency resolution processes (CIRPs), 46.5% ended up in orders for liquidation.

Till December, financial creditors realised nearly 40% of their total claims under the
IBC, while the realisation was at around 182% of the liquidation value.

From the total 1,126 cases ending in liquidation, 82 such cases came about during the October-December quarter. The aggregate claims for the total cases ending in liquidation was Rs 6.15 lakh crore against Rs 44,000 crore assets they had on ground, the data showed.

While October began with 1,749 ongoing CIRPs, December ended with 1717 such cases. Of these ongoing cases, 1,481 CIRPs had stretched beyond 270 days.

The average time taken for approval of a resolution plan under the IBC was 386 days, not counting the time excluded from the process by the adjudicating authority. The time from orders for liquidation till the submission of the final liquidation report was on average 384 days, according to the data.

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