The amount realised by the creditors under the Insolvency and Bankruptcy Code (IBC) as a fraction of their total claims has hit a 15-quarter low of 20.02% in October-December 2025. As per the latest report from Insolvency and Bankruptcy Board of India (IBBI), the claimants recovered just over 20% (or Rs 5,477.4 crore) of the total claims admitted (Rs 27,360.9 crore) by them in cases where the insolvent entities were resolved.
Lower realisation indicates an increase in the value of haircuts by the financial and operational creditors.
What do analysts say?
Analysts said that realisations are likely to stay weak, despite higher resolution counts. “We expect realisation levels to remain subdued unless the structural weaknesses within the insolvency ecosystem are addressed.
According to the Standing Committee on Finance, while the IBC has improved insolvency outcomes, delays, late-stage filings, and valuation shortcomings continue to dilute recovery value,” said an India Ratings report.
The ratings agency said that strengthening institutional capacity, improving transparency, and simplifying the processes focused on micro, small, and medium enterprises are critical to making the framework more effective and timely.
“This is consistent with our view that despite stronger statutory tools such as IBC, recovery outcomes in India continue to be influenced more by execution gaps than by the design of the frameworks themselves,” the agency said.
In the December quarter, the resolution-to-liquidation ratio increased to 1.6, indicating a possible shift in recovery strategies. Although the recovery timelines continue to remain long with about 76% of ongoing corporate insolvency resolution process (CIRP) cases exceeding statutory limits of 330 days.
Better recoveries for creditors
Despite the lower realisation percentage, experts said that IBC continues to deliver better recoveries for creditors over other modes (DRT, SARFAESI) with total recovery of around Rs 4.11 lakh crore under the resolution plans as against the total claims of Rs 12.99 lakh crore.
To be sure, these recoveries do not include the CIRP cost, and many probable future realisations such as equity, realisation from corporate and personal guarantees, funds infused into the entity including capital expenditure by the resolution applicants, and recovery from avoidance applications.
In order to improve recoveries under IBC, the government is planning to revamp the existing legislation through a series of changes. For instance, the IBC (Amendment) Bill 2025 seeks to overhaul the insolvency framework by introducing new concepts like cross-border insolvency, group insolvency and creditor-initiated insolvency resolution process (CIIRP) that will enable faster, out-of-court settlements.
Recently, the finance minister Nirmala Sitharaman told Parliament that the government is considering introducing the amendment bill in the second half of the Budget session that begins on March 9.