Recovery from large insolvency cases at 33% of financial creditors claim

The latest data from the Insolvency and Bankruptcy Board of India (IBBI) for the quarter ending June 2025 reveals significant creditor recoveries under the Insolvency and Bankruptcy Code (IBC). According to the report, creditors realized a total of Rs 3.96 lakh crore through approved resolution plans. This amount was recovered against total admitted claims of Rs. 12.15 lakh crore, translating to an average haircut for creditors of approximately 67%.

The recovery, however, is far more favourable when compared to the value of the assets at the time of the corporate debtor’s entry into the resolution process. Creditors realized a remarkable 170.84% of the liquidation value and 94.89% of the fair value of the assets. This indicates that resolution plans are consistently extracting value far beyond the distressed valuations of the companies.

Outcomes for large and defunct cases

The data highlights a strong performance in resolving large-scale insolvency cases. Of the 1,258 corporate debtors (CDs) that were rescued through resolution plans, 177 had admitted claims exceeding Rs. 1,000 crore. While specific recovery figures for these large cases were not detailed in the report, their resolution has been a key driver of the overall positive recovery numbers.

The realisable value of the assets available with these 177 CDs, when they entered the CIRP, was only Rs. 1.98 lakh crore, though they owed Rs 10.46 lakh crore to the creditors. Till June, 2025, realisation by the claimants under resolution plans in comparison to liquidation value is 178.17%, while the realisation by them in comparison to their claims is 33.70%.

The IBC has also proven effective in reviving defunct companies. Approximately 40% of the resolved CIRPs (497 out of 1,229 with available data) were previously with the Board for Industrial and Financial Reconstruction (BIFR) or were already defunct. In these cases, claimants recovered 18.91% of their admitted claims and 152.42% of the liquidation value, demonstrating the Code’s ability to salvage value from even seemingly hopeless situations.

Liquidation and Timelines

The newsletter also provided an update on liquidation processes. A total of 2,824 CDs have been referred for liquidation. Of these, 1,439 have concluded with the submission of final reports, taking an average of 651 days to close. While the total number of liquidations remains a key metric, the report does not provide specific data on the total amount or percentage recovered through the liquidation route.

For cases that ended in resolution plans, the process took an average of 602 days (excluding time excluded by the Adjudicating Authority) to conclude. This data underscores the continued effort to streamline the resolution process and maximize value for all stakeholders. Of the total concluded cases, Rs 9,602 crore was realised against total claims of Rs 2.62 lakh crore.

Till June 2025, 103 CDs were closed by sale as a going concern under liquidation process. These 103 CDs had claims amounting to Rs 160546 crore, as against the liquidation value of Rs 5674 crore. The liquidators in these cases realized Rs 4678.92 crore and companies were rescued.

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