Post-IBC survivors show mixed performance on bourses, with only Orchid Pharma in green

Companies that emerged from India’s insolvency process and kept their stock exchange listings have delivered sharply divergent returns over the past year, with three of the four most-traded names losing between a third and three-fifths of their value.

Orchid Pharma, acquired by Dhanuka Laboratories through the corporate insolvency resolution process, is the outlier. The stock was at ₹960.40 on September 18, up 21.44% over 12 months and 77.83% over six months, against a 52-week range of ₹471.30 to ₹1,130.

The rest have struggled.

Alok Industries, the textile maker acquired by Reliance Industries with JM Financial Asset Reconstruction Company under a plan the Ahmedabad bench of the National Company Law Tribunal approved in March 2019, traded at ₹7.38 on the BSE on September 11, down 60.76% over a year. Its market capitalisation has roughly halved since January, from about ₹7,726 crore to ₹3,654 crore.

The selling has a visible source. JM Financial ARC sold 15.25 crore Alok shares between August 27 and September 3, according to a disclosure under the SEBI takeover regulations. The exchange sought a clarification from the company on volume movement on August 28. Promoters still hold 75%, leaving a public float of about 20.6%.

Patanjali Foods, the former Ruchi Soya acquired by the Patanjali group in 2019 and by some distance the largest resolved company by value, has fallen about 43% over a year. It closed at ₹367 on September 18 against a 52-week high of ₹615.81, with market capitalisation down from roughly ₹62,143 crore in early January.

Jyoti Structures, the transmission-tower maker that emerged from CIRP in 2019, traded at ₹10.26 on September 9, down 32.64% over a year. It carries an unusual structure for a resolved company: nil promoter holding and a public float of nearly 82%.

Not every resolved company stays listed. Jaypee Infratech, resolved by Suraksha Group, has since been delisted.

The pattern points to a structural feature of post-IBC equity rather than sector weakness. Resolution plans typically hand a new promoter 60-75% of the company, leaving small floats that trade thinly and move violently. Where a resolution applicant partnered an asset reconstruction company, the ARC’s eventual exit creates a supply overhang the float cannot absorb. Alok is a live illustration.

IBBI’s own research has argued that resolved firms show significant revival in average market valuations after resolution. The past year suggests the revival is neither uniform nor durable, and that operating performance eventually reasserts itself. Alok reported a loss of ₹711 crore on revenue of ₹3,775 crore. Orchid was profitable.

For retail investors the read-across is narrow. A resolution plan cleans up a balance sheet. On this evidence, it does not confer a durable re-rating.

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