Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has showed that the resolution of cases under the Corporate Insolvency Resolution Process (CIRP) increased notably, with the percentage of cases closed through the approval of resolution plans reaching 29% in Q3 FY24 as against 17% in Q3 FY23.
As per the report, the uptick in resolutions is believed to be linked to several structural enhancements initiated by the Insolvency and Bankruptcy Board of India (IBBI), such as the addition of adjudicating members and efforts to streamline the process through continuous engagement with stakeholders; however, the sustainability of such reforms still needs to be tested.
Meanwhile, Corporate Insolvency Resolution Process is a recovery mechanism for creditors. If a corporate becomes insolvent, a financial creditor, an operational creditor, or the corporate itself may initiate CIRP. After making an application then CIRP is initiated.
