look news india
New Delhi: With more cases being approved for resolution plans by the National Company Law Tribunal (NCLT), the Insolvency and Bankruptcy Code (IBC) has reached its highest ever resolution in FY24. Moreover, the appointment of new NCLT members has also helped in the resolution of a large number of cases.
According to the Crisil report, 269 cases have been registered in FY 2024, which is an increase of 42 per cent compared to 189 cases in FY 2023. The report further states that about 88 per cent of these 269 cases are backlog admissions from previous years.
Crisil Ratings said the high case resolution pace is a result of IBC's continued efforts to improve resolution across the board through structural reforms.
Interestingly, when it comes to recovery rates, resolution plans in FY24 saw a recovery rate of around 27 per cent of admissible claims, down from 36 per cent in FY23. Also, the resolution timeline was extended to around 850 days as compared to 825 days in the previous fiscal.
With demand likely to stabilize across most sectors, the number of acceptable resolution plans received by lenders under NCLT has increased. Real estate and manufacturing accounted for nearly 65 per cent of the total approved plans for FY24.
It is worth noting that the number of resolutions in the real estate and manufacturing sectors has increased by 200 and 22 per cent respectively as compared to FY23. Good growth is expected in real estate and in the next two financial years. However, in the manufacturing sector, resolutions for medium-sized and small companies were in focus as many large companies had already been resolved.
