63 businesses find debt resolution in Sept quarter recovery from dubious deals go up
Subscribe to enjoy similar stories. New Delhi: Sixtythree indebted companies were given a new lease of life in the September quarter – nearly half the number of distressed businesses to avoid liquidation so far this year. The total number of firms saved under the Insolvency and Bankruptcy Code (IBC) this year is 121, official data showed.
In the eight years since the IBC came into force, 1,068 companies have been pulled back from insolvency, data released by IBBI on Monday showed. Data also showed that bankruptcy action triggered by vendors and other service providers against their clients were fewer than those kicked off by lenders in FY23, FY24 and so far this financial year, a trend that would please policy makers. The higher number of bankruptcy cases initiated by operational creditors was a concern as it showed the IBC was being used by vendors as a recovery mechanism.
However, vendors are more interested in getting their supply terms met rather than in the debt resolution of those companies. The IBC is designed for salvaging companies with fresh investments and corporate restructure where needed or to liquidate companies that are unviable. In the first half of this financial year, 121 companies have managed to get resolution plans approved by the National Company Law Tribunal.
In FY24, a record number of 269 resolution plans were approved by the tribunal, against 189 in the year before. IBBI has been finetuning its regulations to enable quicker decision making by the tribunal. The government in the meantime is drafting legislation to amend the IBC and bring more clarity into the code.
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