HDFC Bank is “exploring an appeal” before the National Company Law Appellate Tribunal (NCLAT) against an NCLT order approving a repayment plan for Essel Group founder Subhash Chandra that entails a 99.97% haircut on creditors’ admitted claims.

The National Company Law Tribunal (NCLT) on Thursday approved the repayment plan under which creditors will receive Rs 6.5 crore against admitted claims of Rs 22,006.57 crore, translating into a recovery of just around 0.03%.

HDFC Bank said its admitted claim accounted for only 3.2% of the total claims and that the facility was inherited from erstwhile HDFC Limited.

“With regard to the referred NCLT matter, HDFC Bank’s admitted claim was only 3.2% of the total stated amount. The bank inherited this facility, which was previously provided by HDFC Limited. HDFC Bank had opposed this settlement and voted against the resolution, which was approved by the majority. The bank is exploring an appeal at NCLAT,” the lender said in a statement.

According to the NCLT order, Axis Bank, Canara Bank, HDFC Bank, LIC Housing Finance, RBL Bank and Union Bank of India voted against the repayment plan. LIC Housing Finance, which had an admitted claim of Rs 1,322.39 crore, termed the plan “unviable and unlawful” as it would receive only around Rs 38 lakh.

The decision was delivered by NCLT Member (Judicial) Nilesh Sharma, who was appointed as the third member after the original two-member bench delivered a split verdict on Chandra’s repayment plan.

Under the proposal, Rs 6.25 crore will be distributed among creditors, while another Rs 25 lakh has been earmarked for insolvency process costs. The plan received the support of creditors representing 80.81% of the voting share.

The tribunal noted that the valuation of Chandra’s personal assets indicated that rejecting the plan was unlikely to result in a better recovery for dissenting creditors.

The NCLT also said the approved repayment plan would be binding on all creditors, including those that voted against it, under Section 115 of the Insolvency and Bankruptcy Code (IBC).

Chandra has been facing insolvency proceedings since 2022, when Indiabulls Housing Finance, now known as Sammaan Capital, approached the NCLT over a personal guarantee provided by him for a Rs 170-crore loan extended to Vivek Infracon.

After the loan turned bad, Indiabulls Housing Finance filed a petition under Section 95 of the IBC seeking initiation of insolvency proceedings against Chandra. The plea was admitted in 2024.