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Approval of 180 Resolution Plans by NCLT in FY23, Resulting in Rs 51,424 Crore Realisation from Stressed Assets

By Rishabh Chamoli | 2023-06-05

The NCLT, the insolvency tribunal in India, has approved a record breaking number of 180 resolution plans in the fiscal year 2023. This marks the highest ever number of approvals, resulting in a total realisation of Rs 51,424 crore from distressed assets. While this achievement is the second highest in terms of creditor realisation, with the highest being in FY19 when the total realisation was Rs 1.11 lakh crore after completing 77 insolvency proceedings, including significant cases such as Essar Steel and Monnet Ispat.

These developments have been instrumental in helping creditors of financially troubled firms in FY23, as they have realised 36 per cent of their total admitted claims amounting to Rs 1,42,543 crore for the year ending March 31, 2023.

Data released by the IBBI (Insolvency and Bankruptcy Board of India) reveals that the combined total liquidation value of the assets of the 180 corporate debtors stood at Rs 39,110.10 crore. Interestingly, creditors received a 131 per cent higher than the liquidation value.

Furthermore, in FY23, the National Company Law Tribunal (NCLT) accepted 1,255 applications from creditors seeking to initiate the Corporate Insolvency Resolution Process (CIRP), one of the highest numbers since 2019. In the previous fiscal years, the NCLT approved 147 resolution plans in FY22, 121 in FY21, and 134 in FY20. The creditors realised 23 per cent, 17 per cent, and 26 per cent of their admitted claims, respectively, in these cases. According to the data, the NCLT has thus far cleared a total of 678 resolution plans by the end of FY23, resulting in creditors realising a sum of Rs 2.86 lakh crore.