Latest news with #YogendraAldak
Mint
01-07-2025
- Business
- Mint
Debt resolution plans see uptick in June quarter, as NCLT vacancies are filled
New Delhi: Creditors rescued 69 indebted businesses in the June quarter through the Insolvency and Bankruptcy Code (IBC) route, improving upon resolutions in the year-ago period but falling a tad lower sequentially, showed official data. In the June quarter of FY25, 58 sick companies were salvaged by their creditors and new investors, showed data available from the Insolvency and Bankruptcy Board of India (IBBI), the sector's rule-maker. The improvement comes in the wake of the government filling vacancies in the National Company Law Tribunal (NCLT)—the judicial authority that clears debt resolution schemes under the bankruptcy code. As of March this year, it had 60 members out of 63 sanctioned posts, data available from the tribunal showed. That is a major improvement, given that at the end of September 2024, the tribunal had only 43 members, or 30% short of its sanctioned strength, Mint reported on 6 December. The number of debt resolutions achieved in the June quarter, however, is a tad below the 75 resolutions reported in the March quarter of FY25. On an average, 62 cases were resolved in a quarter in FY25, with 247 companies getting their restructure plans approved in the full year, IBBI data showed. Experts said debt resolutions in the recent past have actually improved. 'While the quarter-to-quarter trend may not provide a consistent uptick in the resolutions under the IBC, it is interesting to note that as of December 2024, 60% of all resolution plans approved under the IBC had been approved over the preceding three years. Here, it must also be highlighted that an additional 30,000 cases were settled at the pre-admission stage during the same period," said Yogendra Aldak, partner at Lakshmikumaran and Sridharanattorneys. Corporate debt resolution under the IBC came into force in December 2016. Separately, the ministry of corporate affairs said in its monthly newsletter for May that increased institutional capacity and reduced litigation can help improve the outcomes of debt resolution efforts. Better training and support for insolvency professionals, streamlining procedures and enhancing effectiveness of the committee of creditors, which decides on the future of distressed companies, are important areas for future focus, the ministry stated. Experts also believe legislative and administrative changes will help in improving debt resolution outcomes. 'While these provide an optimistic outlook for the future of resolutions in India, the process continues to be hindered by several procedural and institutional hurdles. In order to achieve a truly reliable and efficient resolution mechanism, both legislative policy and administrative practices will have to be re-evaluated in order to successfully tackle the present challenges," Aldak said. Experts said the recruitment of new members in NCLTs has borne fruit. 'It is imperative that the NCLT functions at full strength so that there are no delays in plan approval. Delays in plan approval may lead to further complications such as bidders expressing inability to execute due to passage of time," said Madhav Kanoria, partner at law firm Cyril Amarchand Mangaldas. A few members are set to retire and it is expected that the government will fill the vacancies sooner than later so that matters are disposed of expeditiously, added Kanoria.
Mint
15-05-2025
- Business
- Mint
Bankruptcy resolutions peak in FY25, creditors recover over ₹67,000 crores
New Delhi: Creditors and investors salvaged a record number of 284 companies from bankruptcy in FY25 under provisions of the Insolvency and Bankruptcy Code (IBC), as per data from the National Company Law Tribunal (NCLT). This improvement comes as the government filled vacancies in bankruptcy tribunals and the sector's regulator continued refining rules to enhance the efficiency of the corporate turnaround ecosystem. Creditors stand to recover over ₹ 67,000 crore from these transactions in the recently concluded financial year, a 42% increase compared to the amount recoverable from the turnaround of 275 companies achieved in the same period last year, the data showed. This development also comes amid improving outcomes under IBC—the key policy tool for repairing the balance sheets of lenders and corporations, which is a priority for the NDA government that is banking on a fresh cycle of private investments to bolster economic growth and create jobs. According to the data, as of the end of March, there were only three vacant positions in the 63-member tribunal overseeing bankruptcy cases and company law-related matters, marking a significant improvement in strength after a series of retirements. On 4 October 2022, Mint reported that NCLT had only 28 members then. The tribunal had only 43 members as of end of September last year. NCLT president Justice Ramalingam Sudhakar had last year highlighted the need for manpower capacity addition in the tribunal, at the Insolvency and Bankruptcy Board of India's (IBBI) annual day. 'Give me the numbers, I will give you the result,' he said then, Mint reported on 1 October last year. The uptick in successful resolutions under the IBC reflects maturing institutional capacity, growing creditor confidence and the strengthening of IBC jurisprudence, said Yogendra Aldak, Partner at Lakshmikumaran and Sridharan Attorneys. Developments such as the introduction of mediation, pre-packaged insolvency scheme for micro, small and medium enterprises and landmark Supreme Court rulings on personal guarantor liability and on rejection of delayed claims post-corporate insolvency resolution process have laid the groundwork for faster, more efficient resolutions, said Aldak. The amount recoverable from bankruptcy resolutions achieved in FY25 is second only to the ₹ 1.19 trillion reported recoverable from 81 corporate turnaround cases in FY19. That year witnessed the debt resolution of Essar Steel India Ltd. after a joint venture between the world's largest steelmaker ArcelorMittal and Japan's Nippon Steel Corp. acquired the company for ₹ 42,785 crore under IBC proceedings. Karvy Data Management Services Ltd, Era Infra Engineering Ltd, Sks Power Generation (Chhattisgarh) Ltd, Lanco Amarkantak Power Ltd, Coastal Energen Pvt. Ltd and Metalyst Forgings Ltd, are among the companies that have got debt resolution plans cleared by NCLT in FY25, as per data available from Insolvency and Bankruptcy Board of India (IBBI), the sector's rule maker and regulator of professionals. In each of these cases, creditors stand to realise more than ₹ 1,000 crore of their dues. In the case of Lanco Amarkantak Power, the realisable value reported by IBBI is ₹ 4,101 crore. Experts also said that persistent litigation challenges such as appeals, interlocutory applications, delayed claims, and even invocation of writ jurisdiction continue to disrupt bankruptcy resolution timelines even after a resolution plan has been approved by the distressed company's committee of creditors. 'To improve outcomes, a targeted approach is required to ensure stricter adjudication timelines, increase in the number of dedicated and technical benches, and faster mechanisms for collation of claims,' said Aldak of Lakshmikumaran and Sridharan Attorneys. 'Going forward, it is essential that the Code evolves in line with commercial realities, enabling a synchronous quantitative and qualitative improvement in resolutions.'
Mint
15-05-2025
- Business
- Mint
Bankruptcy resolutions peak in FY25, creditors recover over ₹67,000 crores
New Delhi: Creditors and investors salvaged a record number of 284 companies from bankruptcy in FY25 under provisions of the Insolvency and Bankruptcy Code (IBC), as per data from the National Company Law Tribunal (NCLT). This improvement comes as the government filled vacancies in bankruptcy tribunals and the sector's regulator continued refining rules to enhance the efficiency of the corporate turnaround ecosystem. Creditors stand to recover over ₹ 67,000 crore from these transactions in the recently concluded financial year, a 42% increase compared to the amount recoverable from the turnaround of 275 companies achieved in the same period last year, the data showed. This development comes amid improving outcomes under IBC—the key policy tool for repairing the balance sheets of lenders and corporations, which is a priority for the NDA government that is banking on a fresh cycle of private investments to bolster economic growth and create jobs. According to the data, as of the end of March, there were only three vacant positions in the 63-member tribunal overseeing bankruptcy cases and company law-related matters, marking a significant improvement in strength after a series of retirements. On 4 October 2022, Mint reported that NCLT had only 28 members then. The tribunal had only 43 members as of end of September last year. NCLT president Justice Ramalingam Sudhakar had last year highlighted the need for manpower capacity addition in the tribunal, at the Insolvency and Bankruptcy Board of India's (IBBI) annual day. 'Give me the numbers, I will give you the result,' he said then, Mint reported on 1 October last year. The uptick in successful resolutions under the IBC reflects maturing institutional capacity, growing creditor confidence and the strengthening of IBC jurisprudence, said Yogendra Aldak, Partner at Lakshmikumaran and Sridharan Attorneys. Developments such as the introduction of mediation, pre-packaged insolvency scheme for micro, small and medium enterprises and landmark Supreme Court rulings on personal guarantor liability and on rejection of delayed claims post-corporate insolvency resolution process have laid the groundwork for faster, more efficient resolutions, said Aldak. The amount recoverable from bankruptcy resolutions achieved in FY25 is second only to the ₹ 1.19 trillion reported recoverable from 81 corporate turnaround cases in FY19. That year witnessed the debt resolution of Essar Steel India Ltd. after a joint venture between the world's largest steelmaker ArcelorMittal and Japan's Nippon Steel Corp. acquired the company for ₹ 42,785 crore under IBC proceedings. Karvy Data Management Services Ltd, Era Infra Engineering Ltd, Sks Power Generation (Chhattisgarh) Ltd, Lanco Amarkantak Power Ltd, Coastal Energen Pvt. Ltd and Metalyst Forgings Ltd, are among the companies that have got debt resolution plans cleared by NCLT in FY25, as per data available from Insolvency and Bankruptcy Board of India (IBBI), the sector's rule maker and regulator of professionals. In each of these cases, creditors stand to realise more than ₹ 1,000 crore of their dues. In the case of Lanco Amarkantak Power, the realisable value reported by IBBI is ₹ 4,101 crore. Experts also said that persistent litigation challenges such as appeals, interlocutory applications, delayed claims, and even invocation of writ jurisdiction continue to disrupt bankruptcy resolution timelines even after a resolution plan has been approved by the distressed company's committee of creditors. 'To improve outcomes, a targeted approach is required to ensure stricter adjudication timelines, increase in the number of dedicated and technical benches, and faster mechanisms for collation of claims,' said Aldak of Lakshmikumaran and Sridharan Attorneys. 'Going forward, it is essential that the Code evolves in line with commercial realities, enabling a synchronous quantitative and qualitative improvement in resolutions.' On Wednesday, NCLT president Sudhakar, during the hearing of the resolution plan for Bhushan Power & Steel Ltd, spoke about the need to increase NCLT's sanctioned strength above its existing strength and add new benches.
