IBC: Icra says lenders took 72 pc haircut in Q2; breach of timelines resulting in more liquidations
bankruptcy courts, a report said on Wednesday. In over 71 per cent of the cases, the 270-day timeline is getting exceeded, the report by rating agency Icra said, adding that this is resulting in a higher number of liquidation orders as the elongated process erodes value.
"'Lenders continue to face steep haircuts or reduction in loan amounts of nearly 72 per cent in Q2 FY2025 as the overall resolution process continues to face material delays emerging from litigations from either promoters or dissenting creditors," the agency's group head for structured finance ratings Abhishek Dafria said.
He added that 71 per cent of the ongoing corporate insolvency resolution processes (CIRPs) had exceeded 270 days, post-admission by the NCLT.
«The elongated process results in further erosion of the corporate debtor, which has also resulted in a high share (44 per cent) of CIRPs being closed through liquidation orders,» he said.
The Insolvency and Bankruptcy Code, which was introduced in 2016, suggests that a case be solved in 270 days and one of the objectives for introducing the new bankruptcy laws was to extract the best value for lenders by resolving an asset rather than taking it to liquidation.
Marketing
Digital Marketing Masterclass by Pam Moore
By — Pam Moore, Digital Transformation and Social Media Expert
Artificial Intelligence(AI)
Mastering C++ Fundamentals with Generative AI: A Hands-On
By — Metla Sudha Sekhar, IT Specialist and Developer
Web Development
Mastering Full Stack Development: From Frontend to Backend
