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After the implementation of the IBC two years back, about 1,198 companies have been admitted under the Corporate Insolvency and Resolution Process (CIRP).
According to data put out by the Insolvency and Bankruptcy Board of India (IBBI), in the July-September 2018 quarter alone, 216 cases have been admitted under the IBC. But the pace of resolution of these accounts has been slow.
Of the 1,198 cases under CIRP till date, 118 have been closed on appeal/review, while only 52 have seen approval of resolution plan. In 212 companies, liquidation has been ordered.
Crucial aspects
One of the crucial aspects of the IBC has been time-bound resolution (270-day extended deadline). But IBBI data suggest that adhering to the timelines has been a challenge.
As of September 2018, a total of 816 cases are undergoing CIRP.
Of this, 238 cases are undergoing CIRP for over 270 days and 158 between 180-270 days. Till March 31, 2018, 22 CIRP cases have been resolved.
In the April-June quarter, another 12 have seen resolution, while in the July-September quarter, resolution plan for 18 cases were approved.
Monnet Ispat & Energy, Amtek Auto and Orchid Pharma were some of the cases resolved in the September quarter.
The amount realised by financial creditors in comparison to their claims has fallen substantially in the September quarter against the June quarter.
In the June quarter, while financial creditors realised 56 per cent of their claims for the 12 cases, in the September quarter, they realised a much lower 26 per cent of the claims admitted for the 18 cases.
In the June quarter, two of the big 12 cases – Electrosteel Steels and Bhushan Steel – saw resolution, where the realised amount was 40 and 63 per cent, respectively, of the claims admitted.
In the September quarter, resolution of Monnet Ispat and Amtek Auto resulted in realisation of 26 and 34 per cent of claims, respectively. While the total value of claims against the 18 companies that witnessed resolution was ₹40,404 crore, financial creditors realised just ₹10,617 crore.
July-September quarter
During the July-September 2018 quarter, 75 CIRPs ended in liquidation, taking the total number of CIRPs resulting into liquidation to 212.
Of this, a majority – 163 cases were cases either in the Board for Industrial and Financial Reconstruction (BIFR) – or were non-functional, or both.
Resolution value was less than liquidation value in the case of 182 companies under that went into liquidation.
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