The Insolvency and Bankruptcy Board of India, on 25 June 2025, published its quarterly newsletter containing updated statistics on the functioning of the Insolvency and Bankruptcy Code, 2016 for the first quarter of financial year 2025-26. The data reveals an improvement in resolution timelines, with the average resolution period declining to 480 days from 520 days in the preceding quarter, alongside 876 new admissions into the corporate insolvency resolution process during April to June 2025.
Background
The Insolvency and Bankruptcy Code, enacted in 2016, prescribes a time-bound resolution framework for corporate debtors, with the statutory timeline capped at 330 days including litigation time. However, actual resolution periods have consistently exceeded this statutory limit, raising concerns about the efficacy of the framework. The Supreme Court of India has repeatedly observed in various proceedings that adherence to the prescribed timelines is essential to the objectives of the Code.
IBBI publishes quarterly data covering admission trends, resolution outcomes, liquidation statistics, and recovery rates to provide transparency on the functioning of the insolvency ecosystem. The Q1 FY26 data set covers the period from 1 April to 30 June 2025 and captures trends across all NCLTs and the appellate tribunal.
Key Provisions
The quarterly newsletter presents the following data points:
New admissions: A total of 876 corporate debtors were admitted into the corporate insolvency resolution process during Q1 FY26, representing a moderate increase from 842 admissions in the previous quarter. Financial creditors initiated approximately 52 per cent of applications, operational creditors accounted for 38 per cent, and corporate debtors themselves filed the remaining 10 per cent.
Resolution outcomes: Of the cases that concluded during the quarter, 128 resulted in approval of resolution plans, while 184 were ordered into liquidation. The resolution rate — measured as the proportion of concluded cases ending in resolution rather than liquidation — stood at approximately 41 per cent, a marginal improvement over the prior quarter.
Timeline improvement: The average time taken for completion of the resolution process declined to 480 days from 520 days in the preceding quarter, though this remains significantly above the statutory maximum of 330 days. IBBI attributed the improvement to reduced adjournment frequency and more efficient functioning of the Committees of Creditors.
Recovery rates: Realisable value as a percentage of admitted claims in resolved cases averaged 32 per cent during the quarter. Recovery as a percentage of liquidation value remained above 160 per cent, indicating that the resolution process continues to deliver better outcomes than liquidation.
Implications for Practitioners
The improvement in resolution timelines, while incremental, is a positive signal for the insolvency ecosystem. Practitioners should note, however, that 480 days remains substantially above the statutory 330-day limit, and NCLT benches may continue to face judicial pressure to expedite proceedings.
The 41 per cent resolution rate underscores the reality that a majority of admitted cases still end in liquidation. For insolvency professionals, this reinforces the importance of early identification of viable resolution applicants and proactive marketing of the corporate debtor as a going concern during the initial period of the process.
Financial creditors evaluating IBC as a recovery mechanism should calibrate expectations based on the 32 per cent average recovery rate. While this exceeds recovery rates under the erstwhile frameworks, it reflects the challenge of preserving enterprise value through prolonged resolution processes. Practitioners advising operational creditors should note their continued active role in initiating proceedings, accounting for 38 per cent of new admissions.