NEW DELHI: Financial creditors have realised Rs 42,630 crore or 25.46% of their total claims under the insolvency resolution process in the April-June period of the current financial year (FY22), showed the latest quarterly newsletter of the Insolvency and Bankruptcy Board of India (IBBI).
As many as 4,541 CIRPs (Corporate Insolvency Resolution Process) were initiated till the end of June and out of them, 2,859 were closed. As of June 2021, the lenders could recover just Rs 2.45 lakh crore or 36% of the total claims amounting to Rs 6.82 lakh crore from 396 companies that were resolved till June 30.
During the quarter of April-June 2021, 62 CIRPs ended in orders for liquidation, taking the total CIRPs ending in liquidation to 1,349 but the economic value in most of the cases had eroded even before the insolvency resolution process kicked off.
“About 75% of the CIRPs ending in liquidation (1,011 out of 1,349) were earlier with the Board for Industrial and Financial Reconstruction and/ or defunct. These corporate debtors had assets, on average, valued at around 7% of the outstanding debt amount,” the newsletter added.
A total of 36 CIRPs, including the Videocon group, yielded resolution plans with different degrees of realisation as compared to the liquidation value.
For instance, the total claims of financial creditors for these cases stood at Rs 1,67,463 crore, out of which just Rs 42,630 crore has been realised.
The realisation by financial creditors under resolution plans in comparison to liquidation value is 127.94% or Rs 33, 321 crore during the quarter, while the realisation by them in comparison to their claims was 25.46%.
The share of CIRPs initiated by corporate debtors is declining over time and they usually initiate the process with very high underlying defaults.
Rs 2.45 L cr Total amount recovered
Rs 6.82 L cr Total claims
396 Number of firms resolved