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Data compiled by the Insolvency and Bankruptcy Board of India (IBBI) suggests that creditors are possibly staring at an average haircut of 92 percent in recoveries from 124 out of the 136 stressed firms that were facing liquidation under the Insolvency and Bankruptcy (IBC) code at the end of the June quarter because of the absence of resolution plans.
According to a report by The Financial Express, while the total admitted claims of creditors, mainly banks, stand at Rs 57,121 crore, liquidation value of the 124 firms has been pegged at just Rs 4,817 crore.
Liquidation values of around dozen other companies have not been determined as yet. The total admitted debt of all 136 stressed companies stands at around Rs 57,378 crore, including claims of both financial and operational creditors.
Some of the stressed companies undergoing liquidation are REI Agro, with a total debt of Rs 8,626 crore, Gujarat NRE Coke (Rs 5,251 crore), Rotomac Global (Rs 3,944 crore), Roofit Industries (Rs 3,943 crore) and Gupta Coal India (Rs 3,895 crore), among others.
In comparison, creditors recovered Rs 49,783 crore of admitted claims, around 56 percent of the total, from 32 stressed firms for which resolution plans were approved by the National Company Law Tribunal (NCLT) by the end of June.
The haircut in old cases is unavoidable as most of these companies had been stressed for years before the IBC was introduced in 2016, analysts were quoted as saying. As a result, liquidation at scrap value was the only natural outcome, they said.
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