NCLT approved record 269 resolution plans in FY24
NCLT) approved a record 269 resolution plans under the insolvency law in 2023-24, which is 42 per cent higher than the year-ago period, a report by Crisil Ratings said.
Of the 269 cases, 88 per cent are from the backlog of earlier years' admissions.
This has been driven by greater investor interest in turnaround of stressed assets as seen in the resolution plan submissions.
Appointment of new NCLT members has also aided in higher number of resolution cases. However, the moderation in recovery rates and stretched timelines played spoilsport.
Financial year 2023-24 saw resolution plans with recovery rate of 27 per cent of admitted claims, lower than 36 per cent realised in FY23.
Real estate and manufacturing contributed 65 per cent of total plans approved for fiscal 2024.
Crisil Ratings further said resolution timelines stretched to 850 days compared with 825 days in the previous fiscal.
With demand durability likely across most sectors, the number of acceptable resolution plans received by lenders under NCLT has increased, it added.
Resolution count in the real estate and manufacturing sectors increased by 200 per cent and 22 per cent, respectively, in FY24, compared with the previous year.
In the real estate sector, healthy demand growth for residential real estate in FY24, and expectation of healthy growth over the next two fiscals have sparked interest among resolution applicants.
In manufacturing, resolutions for mid-sized and small companies were in focus as many larger companies were already resolved,
