India’s corporate insolvency cases fell 28% to 724 in FY2025, according to ICRA Limited, a prominent Indian credit rating agency headquartered in Gurugram, Haryana. Despite the drop in cases, recoveries under the Insolvency and Bankruptcy Code (IBC) remain low, averaging just 33%. FY2025 saw improved recovery in large-value cases, yet overall resolution timelines continued to exceed legal deadlines.
Corporate insolvency filings in India fell significantly in FY2025, dropping by 28% to 724 cases under the Insolvency and Bankruptcy Code (IBC), according to data released by ICRA Limited, a leading Indian credit rating agency based in Gurugram, Haryana.
Despite the decline, ICRA highlighted that overall recovery rates remain sluggish, with lenders facing average haircuts of 67%. While a few large cases recorded strong recoveries — as high as 77% against admitted claims in Q4 — the general pace and outcome of resolutions under the IBC remain concerning.
Introduced in 2016, the IBC was designed to streamline insolvency proceedings, protect creditor rights, and foster entrepreneurship by encouraging timely and structured resolutions. However, ICRA noted that 78% of active Corporate Insolvency Resolution Process (CIRP) cases had surpassed the 270-day statutory limit, as of March 31, 2025.
The number of approved resolution plans also fell marginally to 259 from 263 in the previous fiscal year. ICRA reported that while large-value cases drove most of the recoveries in Q4 FY2025, they only accounted for 10% of the total approved plans, indicating the skewed nature of recoveries.
“FY2025 showed encouraging realisations in a few cases, but the average resolution time worsened to 713 days,” said Manushree Saggar, Senior Vice President at ICRA. “The need for timely resolution is more important than ever, particularly with increasing delays and rising liquidation shares.”
To address the issues, the Insolvency and Bankruptcy Board of India (IBBI) introduced amendments to the code in Q4 FY2025 aimed at improving the auction and liquidation processes. The agency also stressed the importance of developing the Pre-packaged Insolvency Resolution Process (PPIRP) to effectively manage smaller cases, which often clog the system.
Since the IBC’s inception, over 8,300 companies have entered insolvency, with 61% of these cases resolved. Yet only 33% of admitted claims are typically recovered via resolution plans, compared to just 4% through liquidation.
ICRA believes that the future success of the IBC will depend on accelerating resolution timelines, improving outcomes in smaller-value cases, and maximizing recoveries in high-value defaults.
