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IBC Reform Urged as Recoveries Fall and Delays Persist
India’s insolvency system is meant to help struggling companies recover or close in an orderly way.
Many cases are taking much longer than the intended timeline.
By June 30, 2026, only about one in six admitted cases had ended with a successful resolution.
Creditors recovered about 30.5% of the money they were owed.
This means they lost an average of nearly 70% of their claims.
Delays can cause companies to lose customers, workers, suppliers, and business value.
Experts say courts, information systems, and early-warning tools need improvement.
They also support restructuring companies before their financial problems become too severe.
The goal is to resolve cases faster and recover more money.
Only about 16.2% of 9,166 insolvency cases admitted by June 30, 2026, had ended in successful resolution.
Creditors recovered approximately Rs 4.35 lakh crore from Rs 14.27 lakh crore in admitted claims, a 30.5% recovery rate.
The average haircut on claims reached 69.5%, while the average resolution period rose to 757 days.
More than 3,000 cases ended in liquidation, and 76% of ongoing proceedings had exceeded 270 days.
CareEdge Ratings’ Saurabh Bhalerao called for stronger judicial capacity, earlier intervention, and improved information transparency.
- Who
- Creditors, distressed companies, banks, insolvency authorities, and CareEdge Ratings Director Saurabh Bhalerao are involved in the issue.
- What
- The Insolvency and Bankruptcy Code is facing calls for reform because recoveries remain low and insolvency proceedings are taking too long.
- Where
- The data concerns insolvency proceedings in India, with the report datelined Chennai.
- When
- The figures cited are as of June 30, 2026; the average resolution period had risen from March 2025 through March 2026.
- Why
- Litigation, procedural delays, valuation disputes, stakeholder disagreements, difficulty attracting resolution applicants, and late entry into insolvency are reducing recoveries.
Key facts
- Cases admitted
- 9,166 companies had entered the Corporate Insolvency Resolution Process by June 30, 2026.
- Successful resolutions
- Around 1,500 cases, or 16.2%, ended in successful resolution.
- Claims and recoveries
- Admitted claims totaled Rs 14.27 lakh crore, while approximately Rs 4.35 lakh crore was recovered.
- Recovery rate
- The cumulative recovery rate was 30.5%, equivalent to an average haircut of 69.5%.
- Resolution timeline
- The average resolution period reached 757 days in June 2026.
- Liquidation
- More than 3,000 cases ended in liquidation, which took about 540 days on average.
- Pending proceedings
- Around 76% of ongoing insolvency cases had exceeded 270 days, while nearly 70% of ongoing liquidation cases had been pending for more than two years.
Sources
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