Data: As per IBBI Data, About 44% of The Closed CIRPs Moved Into Liquidation
The Insolvency and Bankruptcy Code (IBC), enacted on 28 May 2016, was designed to address corporate distress by enabling quicker resolution of insolvency cases and aiming to preserve the value of assets. As of December 2024, a total of 8,175 Corporate Insolvency Resolution Processes (CIRPs) had been admitted under the Code. Among the cases that have reached closure, about 56% of closed CIRPs were settled through resolution, withdrawal, or legal closure, while the remaining 44% moved into liquidation.
In a landmark decision, the Supreme Court of India rejected the resolution plan submitted by JSW Steel for Bhushan Power and Steel Ltd. (BPSL), bringing an end to a Corporate Insolvency Resolution Process (CIRP) that began in July 2017. After more than seven years, the apex court ordered the liquidation of BPSL, citing procedural lapses and non-compliance with provisions of the Insolvency and Bankruptcy Code, 2016 (IBC) and the CIRP Regulations. The judgment has sparked significant concerns about the integrity of the insolvency framework and the potential implications for ongoing and future resolution cases.
Against this backdrop, it becomes essential to evaluate how the Insolvency and Bankruptcy Code has performed over the years and to understand the role played by the Insolvency and Bankruptcy Board of India (IBBI).
The insights in this analysis are drawn from Dataful’s curated datasets on the IBBI, which can be found here. This piece also serves as an update to our earlier coverage on the subject, which can be accessed here and here.
Less than 15% of the CIRPs initiated led to resolution
The Insolvency and Bankruptcy Code (IBC), enacted on 28 May 2016, was designed to address corporate distress by enabling quicker resolution of insolvency cases and aiming to preserve the value of assets. One of its broader objectives is to support a more business-friendly environment and improve credit availability in the economy.
As of December 2024, a total of 8,175 Corporate Insolvency Resolution Processes (CIRPs) had been admitted under the Code. Of these, 1,983 cases were still ongoing. Among the cases that have reached closure, 1,119 ended with an approved resolution plan, 1,130 were withdrawn under Section 12A, and 1,236 concluded through appeal, review, or settlement. Meanwhile, 2,707 cases resulted in liquidation. Overall, about 56% of closed CIRPs were settled through resolution, withdrawal, or legal closure, while the remaining 44% moved into liquidation.
The stakeholder-wise initiation of CIRPs show that almost 94% of the CIRPs initiated were by Financial Creditors (FCs) and Operational Creditors (OCs). The rest 6% were by Corporate Debtors (CDs). When looking at the sector-wise distribution of CIRPs, it’s clear that a majority originate from the manufacturing and real estate sectors, which account for 37% and 22% of the total cases, respectively. These are followed by construction (12%) and retail trade (10%), indicating that stress under the IBC is concentrated in a few key industries.
Number of liquidations under IBC going down
The IBC was designed to help struggling companies either find a way back to viability or, if that’s not possible, wind down in an orderly and fair manner. When efforts to revive a company don’t work out, the next step is liquidation—selling off its assets and distributing the returns among creditors and stakeholders.
Over time, the IBC has shown progress. More companies are now being resolved than sent into liquidation, and this shift has become especially noticeable since 2020–21. For instance, back in 2017–18, five companies went into liquidation for every one that was successfully resolved. Fast forward to 2024–25 (up to December), and that number has dropped to just 1.3 liquidations per resolution.
Still, liquidation remains a necessary part of the process when resolution isn’t feasible. A key part of liquidation is selling off a company’s assets in a way that helps recover the maximum value. But in practice, this hasn’t always been smooth. Different liquidators use different online portals, auctions aren’t always well-publicised, and there’s no standard way to reach potential buyers. This lack of coordination can result in poor visibility, fewer bidders, and lower recovery rates.
To tackle these issues, the Insolvency and Bankruptcy Board of India (IBBI), in partnership with the Indian Banks’ Association, launched a unified auction platform called BAANKNET (short for Bank Asset Auction Network, earlier known as eBKray). Managed by PSB Alliance Pvt. Ltd.—a company owned by 12 public sector banks—BAANKNET brings all auctions under one roof.
As of 27 January 2025, BAANKNET had listed over 62,000 properties and conducted more than 63,000 auctions, with assets worth ₹5,356 crore auctioned. Around 9,600 additional auctions are scheduled to take place. Following its increasing use, the IBBI has decided to adopt BAANKNET as the common platform for asset auctions under the IBC’s liquidation process.
Inspections by IBBI
Insolvency Professionals (IPs), also referred to as Resolution Professionals (RPs), are one of the key pillars of the insolvency resolution framework. They serve as intermediaries in the corporate insolvency process and play a crucial role in ensuring it runs efficiently and in line with the law. To maintain accountability, the Insolvency and Bankruptcy Board of India (IBBI) is responsible for acting if any misconduct or non-compliance is found in an IP’s conduct. If there are reasonable grounds to suspect a violation of the Code or related regulations, the IBBI can initiate an inspection. Based on its findings, it may issue a show-cause notice (SCN) to the concerned professional.
As of 31 December 2024, a total of 4,592 Insolvency Professionals (IPs) had been registered. Of these, registrations of 15 were cancelled following disciplinary action, 24 were cancelled for not meeting the ‘fit and proper’ criteria, and 34 professionals are no longer active due to death. That leaves 4,431 individual IPs currently registered, of whom 457—or around 10%—are women.
Since the implementation of the IBC, 176 Insolvency Professional Entities (IPEs) have been recognised, with 48 of them later being derecognised. By the end of 2023–24, 223 inspections had been initiated; 263 inspections were completed, and 79 were still ongoing. During 2023–24 alone, 68 show-cause notices were issued to IPs, and 52 of these cases were disposed of.
Issues remain, but IBC has had decent success
One of the main challenges with the IBC process is the time it takes to reach an outcome. On average, CIRPs that ended in resolution took 585 days, and those that ended in liquidation took 508 days. Full liquidation processes took even longer—around 645 days—while voluntary liquidations were quicker at 404 days. These delays often lead to a loss in value and lower chances of a successful turnaround.
Despite this, the IBC’s resolution path has shown a meaningful impact. It allows financially stressed companies to stay in business, helping protect jobs and investments. A study by IIM Ahmedabad found that, on average, resolved companies saw a 76% rise in sales within three years. While they aren’t fully profitable yet, they are covering their operating costs.
Employee expenses rose by nearly 50%, indicating more jobs or better wages. These firms also saw a 50% increase in assets and a 130% jump in capital investment—signs of expansion and rebuilding. Overall, even with delays, the resolution process under IBC shows positive outcomes.