FY24 was bittersweet year for corporate insolvency resolution process under IBC: Ind-Ra
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
https://t.me/InvestmentGuruIndiacom
Download Telegram App before Joining the Channel
With the average resolution time jumping to a four-year high and the recovery levels at their lowest for corporate debtors (CDs) and financial creditors (FCs) in the past four years, credit rating agency India Ratings and Research (Ind-Ra) in its latest report has predicted that FY24 was a bittersweet year for the corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code (IBC).
However, as per the report, there was a sharp rise in the recovery for operational creditors (OCs) and the number of cases closed under CIRP has outpaced the cases admitted first time since FY21. The number of cases closed through the resolution plan route has seen a steady improvement, as reflected by the improving ratio of resolution orders to liquidation orders.
But, the rating agency noted that the lengthening timeline to achieve resolution has led to a significant fall in the recovery rate. It said that the recovery efficiency of cases closed within 333 days is 49% which falls sharply to 26% once the period crosses 600 days.
