Successful settlements of corporate insolvency proceedings until the end of 2019 are set to result in recoveries of Rs 1.52 lakh crore for lenders, averaging 43.1 percent of their filed claims of Rs 3.52 lakh crore, according to data released from the Insolvency and Bankruptcy Board of India (IBBI).

Resolutions at the quarter through December 2019, however, yielded only around 12.2%, or about Rs 2,879 crore, of the admitted claims of Rs 23,668 crore. In the preceding quarter, lenders recovered around 34.4percent of their total claims of Rs 78,592 crore.

Many of the large cases have already been solved and the smaller companies that are undergoing resolution procedure are finding fewer suitors, said specialists, explaining the reason for the collapse in recoveries.

“Trends suggest that there are lower recoveries in smaller instances, in which there are not many takers for stranded business resources. With many of the bigger cases beings solved or near resolution, we are very likely to see lower average recoveries for lenders going forward,” said an industry watcher, who desired to remain anonymous.

Seven of these cases have finished with the acceptance of resolution plans, while in two cases the bankruptcy court has ordered liquidation. Three other cases are now undergoing the insolvency resolution procedure.

A total of 190 corporate insolvency proceedings since the IBC came to force have finished with successful settlement plans until December 31, 2019. But in 57.7% of their proceedings, or 780 instances, the court has ordered liquidation of their corporate debtors’ resources.

The IBBI newsletter noted that about 72.5percent of those instances that finished with liquidation orders were earlier under the Board of Industrial and Financial Reconstruction regime. “The economic value in the majority of these CDs (corporate debtors) had already eroded before they had been admitted into CIRP (corporate insolvency resolution procedure,” the IBBI release said.

Separately, 579 voluntary liquidation proceedings are initiated by corporate debtors until the end of 2019.

This post was originally published here.