NCLT Permitted Record 269 Resolution Plan in FY24

                The National Company Law Tribunal (NCLT) approved a record 269 resolution plans under the insolvency law in 2023-24, which is 42 per cent higher than the year-ago period, a report 
by Crisil Ratings said. Of the 269 cases, 88 per cent are from the backlog of earlier years’ admissions. This has been driven by greater investor interest in turnaround of stressed assets 
as seen in the resolution plan submissions. Appointment of new NCLT members has also aided in higher number of resolution cases. 

However, the moderation in recovery rates and stretched timelines played spoilsport. FY2023-24 saw resolution plans with recovery rate of 27 per cent of admitted claims, lower than 36 
per cent realised in FY23. Real estate and manufacturing contributed 65 per cent of total plans approved for fiscal 2024. Also Read - Anant S Iyer takes over as new Director General of 
CIABC Crisil Ratings further said resolution timelines stretched to 850 days compared with 825 days in the previous fiscal. With demand durability likely across most sectors, the number 
of acceptable resolution plans received by lenders under NCLT has increased, it added. Resolution count in the real estate and manufacturing sectors increased by 200 per cent and 22 
per cent, respectively, in FY24, compared with the previous year. In the real estate sector, healthy demand growth for residential real estate in FY24, and expectation of healthy growth 
over the next two fiscals have sparked interest among resolution applicants. In manufacturing, resolutions for mid-sized and small companies were in focus as many larger companies 
were already resolved, said Crisil Ratings. 
“The higher case resolution momentum is a result of continuous efforts to improve the resolution throughput rate of IBC through structural reforms, the most prominent being the 
appointment of 15 additional Nclt members in the later part of fiscal 2023,” Crisil Ratings Senior Director Mohit Makhija said.

Source : The Economic Time