Debt Resolution Plans Pick Up Steam—But Is It Enough?
You know how it goes—when the NCLT finally gets its act together, things start moving. And that’s exactly what we’re seeing this year. With 247 companies getting their restructuring plans approved in FY25 (that’s about 62 cases every quarter), it’s clear something’s changed. The tribunal’s working faster than before, thanks to judges actually filling those empty chairs and some smart policy tweaks. But here’s the real question: will this actually fix India’s mountain of bad debt? Let’s break it down.
How the NCLT Stepped Up Its Game
By the Numbers
Remember FY24? They were handling 48 cases per quarter. FY23? Just 41. Now we’re at 62—that’s not just progress, that’s the system finally waking up. The June quarter was especially busy, and you can bet those newly filled vacancies had everything to do with it.
Who’s Getting the Most Help?
Real estate’s leading the pack—no surprise there. Nearly 30% of cases come from builders stuck with half-finished projects and empty wallets. Manufacturing’s next at 22%, mostly companies that got wrecked by supply chain messes. Honestly, it’s the same old story: sectors that took the hardest hits during the bad years are now lining up for debt relief.
Why Things Are Moving Faster Now
Judges Matter—Who Knew?
They brought in 12 new members early this year, and suddenly cases are getting resolved 20% faster. A guy from the IBBI put it perfectly: “We were basically running on fumes before.” Now? At least the engine’s turning over.
The IBBI’s Smart Play
Here’s something cool—15% of approved plans used this “pre-packaged” insolvency thing, especially for small businesses. Plus they made creditors actually stick to deadlines. Shocking concept, right? Turns out when you force people to decide faster, things get done.
Stories That Actually Ended Well
Wins Worth Noting
Take Vivaana Industries—textile company, saved 1,200 jobs even though lenders had to swallow a 45% haircut. Or Greenway Infra, where creditors swapped debt for equity. These aren’t just numbers—they’re proof the system can work when everything clicks.
The New Normal
Lenders are taking 52% haircuts on average (down from 55% last year). And cases now wrap up in 330 days instead of 420. Still way over the 270-day target, but hey—progress is progress.
Don’t Break Out the Champagne Yet
The Elephant in the Room
4,200 cases still waiting. And 18% of those are already past their deadline. Same old problems—too many adjournments, too much pointless litigation. Some things never change.
Storm Clouds Ahead
With interest rates climbing and prices going nuts, more companies might hit the skids. And let’s be real—until they fix the land dispute mess, real estate cases will keep moving at a snail’s pace.
What Comes Next?
Crystal Ball Time
If they keep the benches staffed, we could see 15-20% more resolutions next year. But with global money getting tight, recovering value from stressed assets might get tougher.
How to Fix This Thing
More judges, sure. But we also need alternative fixes—like mediation. As economist Rupa Subramanya said, “The IBC shouldn’t just be about scraping back pennies—it should revive companies.” Spot on.
The Bottom Line
This year proved the NCLT can actually make a difference when it’s not tied down. There’s still a long road ahead, but for the first time in ages, it feels like we’re moving. Now everyone—from policymakers to bankers—needs to keep pushing in the same direction. Because let’s face it: you can’t build the future until you clean up the past.
Source: Livemint – Companies
