Indicating a moderation in corporate stress, the fresh admission of cases under India’s insolvency framework slowed down in FY26 with around 663 corporate insolvency resolution process (CIRP) cases were admitted, down from 733 cases in the previous financial year, a CareEdge Ratings report said.

The report noted that while the cumulative admissions under the insolvency and bankruptcy code (IBC) rose to 8,987 cases by March 2026, the pace of incremental admissions has moderated significantly from the peak years following the rollout of the bankruptcy law.

“The number of admitted cases rose to 8,987 in FY26, reflecting continued expansion in the insolvency resolution ecosystem. However, despite this increase, the total admissions through FY26 remained below 700, indicating relatively subdued levels over the past five years,” it said.

As per the ratings agency, around 15.8% of cases were successfully resolved till March 2026 through approved resolution plans, which is marginally better than 14.4% in March 2025. However, only about 21% of cases remained ongoing in the resolution process, down from 23.2% a year earlier, reflecting a gradual decline in the share of live cases.

Also, liquidation continued to remain the dominant mode of closure with over 3,000 cases, accounting for 33.4% of total admitted cases, ended up in liquidation as of March 2026, compared with 32.2% in March 2025. A significant proportion of these cases include legacy-stressed/defunct entities.

The report noted that the composition of CIRP initiations has undergone a notable shift in the recent years, marked by a decline in cases initiated by corporate debtors and a moderation in filings by operational creditors. “The financial creditors continue to account for the largest share of insolvency filings, underscoring the increasing institutionalisation and wider acceptance of the IBC as a creditor-driven resolution framework,” it said.

Despite the moderation in fresh filings, the timelines for resolution and liquidation continued to worsen. The average time taken for resolution cases increased to 744 days in March 2026 from 713 days a year earlier, while liquidation timelines rose to 531 days from 508 days during the same period. Further, the ratings agency said that nearly 78% of the 1,885 ongoing CIRP cases had remained pending for more than 270 days, marginally higher than 76% in December 2025 and broadly in line with the level observed in March 2025.

Meanwhile, the aggregate recovery rate under the IBC remained weak, easing to 30.6% in the fourth quarter of FY26 from 31.6% in the previous quarter, implying an average haircut of nearly 69% for creditors on admitted claims.

CareEdge also pointed out that the recently-enacted IBC (Amendment) Act 2026, which introduces tighter timelines, a new Creditor-Initiated Insolvency Resolution Process (CIIRP) framework, and provisions for group and cross-border insolvency, could help improve recoveries and reduce delays over the medium term.

“A structural shift is the extension of creditor primacy beyond CIRP into liquidation, through enhanced CoC supervision and control over the appointment and replacement of liquidators. This could improve commercial decision-making in liquidation. Additionally, separating the resolution and liquidation roles further reduces the risk of viable firms being pushed into liquidation. Together, these changes can improve recoveries,” the report said.