Recovery from resolutions in Jan-Mar’23 at 50% of admitted claims
In the January-March 2023 quarter, 70 Corporate Insolvency Resolution Processes (CIRPs) ended in resolution leading to recovery of Rs 32,137 crore against lenders’ admitted claims of Rs 65,116 crore, resulting in almost 50% recovery, according to the latest quarterly newsletter of Insolvency and Bankruptcy Board.
Since the start of IBC in 2016, a total of 678 cases out of 6,571 CIRPs ended in resolution fetching Rs 2.86 lakh crore against lenders’ admitted claims of Rs 9 lakh crore resulting in about 32% recovery. The average time taken for resolution of the 678 cases is 512 days (excluding the extensions given by the adjudicating authorities).
Jaypee Infratech is the biggest CIRP that ended in resolution during the quarter. Jaypee Infratech fetched creditors Rs 20,363 crore out of the total creditors claim of Rs 23,083 crore, resulting in 88% recovery. Suraksha Realty and Lakshdeep Investments and Finance emerged as the successful resolution applicant for Jaypee Infratech.
JBF Petrochemicals, which fetched the creditors Rs 2,050 crore against their admitted claims of Rs 5,628 crore, was successfully bagged by Gail (India). Karaikal Port fetched Rs 1583 crore to creditors and was acquired by Adani Port and SEZ. Sintax-BAPL, which was acquired by Welspun Group, fetched Rs 1,251 crore to creditors against their admitted claims of Rs 3,266 crore.
Resolution before admission
As many as 25,107 cases with underlying default of Rs 8.81 lakh crore were resolved even without admission.
Liquidation
In the March quarter, 120 CIRPs ended in liquidation. These cases involved admitted claims of Rs 6,950 crore and fetched around Rs 157 crore, of which Rs 135 crore has been disbursed among the lenders and other stakeholders.
Since 2016, 2030 CIRPs ended in liquidation. Total admitted claims in these cases amounted to Rs 10.6 lakh crore but the total liquidation value of all the corporate debtors liquidated/undergoing liquidation amounted to only Rs 56,700 crore.
Till March 2023, 310 liquidation processes ended in closure by dissolution, sale as going concern/compromise or arrangement. These involved total admitted claims of Rs 71,000 crore resulting in sales proceeds of Rs 2,650 crore and disbursal of 2,447 crore among different stakeholders.
Sale as going concern
IBC laws allow a corporate debtor to be sold as a going concern during the liquidation process. Till 31 March 2023, 27 corporate debtors have been sold as going concern during the liquidation process. In these 27 cases, liquidators recovered Rs 758 crore against lenders admitted claims of Rs 23,100 crore.
Withdrawal under Section 12A
Till 31 March 2023, 848 CIRPs have been withdrawn under Section 12A of the IBC. Almost 3/4th of these cases involved claims of less than Rs 10 crore. 55% of sauch cases had less than Rs 1 crore claims. Only 1% of those cases involved claims of Rs 1,000 or more.
Voluntary liquidation
Till 31 March 2023, 1,544 corporate persons had initiated voluntary liquidation for different reasons. The most common reason (69%) quoted was Not carrying business operations. As many as 15% of them felt the business was commercially unviable and hence filed for liquidation. Most of these were small companies with 897 of them having paid-up capital of less than Rs 1 crore. Only 199 had paid-up capital exceeding Rs 5 crore.
Personal Insolvency resolution process (PIRP)
As of 31 March 2023, 1,839 applications for initiation of personal insolvency resolution process had been filed in NCLT and DRTs. Total debt amount involved in these cases is Rs 1.53 lakh crore. So far only 208 cases have been admitted, and only 14 of those have yielded approval of repayment plans. In the 14 cases where repayment plans were approved, the total realisation was Rs 23 crore against the admitted claims of 1,472 crore.
Also Read: Success of IBC should be judged on number of resolutions not on amount recovered: IBBI Chairman
