According to a study by the Indian Institute of Management, Ahmedabad, covering 1,194 firms that underwent resolution process till 2025, their sales increased by about 90 per cent over five years post-resolution. Their capital expenditure increased by over 100 per cent, while expenses on employees went up by over 70 per cent. As reported by the Insolvency and Bankruptcy Board of India, as of March 2026, creditors have recovered ₹4.32 trillion under resolution plans. In about 1,300 cases where fair value was established, the recovery was over 94 per cent, while creditors realised 166.85 per cent of the liquidation value. The Business Standard analysis reveals that firms resolved under the IBC demonstrated operational revival post-resolution, with sales and capital expenditure nearly doubling, asset utilisation improving sharply, and the aggregate market capitalisation of resolved firms rose from about ₹2.8 trillion to ₹9 trillion.
The 1,419 cases that yielded resolution plans till March 2026, on average, took 621 days to complete. In about 3,003 companies that entered liquidation, it took, on average, 531 days to complete the process. According to the study, over 40 per cent of the firms that yielded resolution plans were from the Board for Industrial and Financial Reconstruction or defunct, which reduced the average realised value. The time taken since the first resolution in 2017 has inched up rapidly every year, reaching 744 days as of March 2026, against the mandated time limit of 330 days (earlier 270 days). The Business Standard reports that admission delays alone frequently exceeded a year, with the Supreme Court noting that nearly 400 approved resolution plans remain pending for final approval, some for several years. The Insolvency and Bankruptcy Board of India data shows that realisation relative to liquidation value has reportedly fallen by about 30 per cent, with recoveries declining from 170 per cent as of March 2025 to 167 per cent as of March 2026. As per M S Sahoo, former head of IBBI, "Delays in concluding proceedings are thus imposing enormous economic costs."
The IBC has consistently accounted for the largest share of recoveries by scheduled commercial banks from distressed assets, outperforming dedicated recovery mechanisms. Gross non-performing assets, which peaked at 14.8 per cent in 2018, declined sharply to about 2.2 per cent by 2025. According to the Reserve Bank of India's report "Trends and Progress on Banking in India 2024-25", of the ₹1.04 trillion recovered by scheduled commercial banks through various mechanisms, nearly ₹54,528 crore came through the IBC route. The banking system's recovery reflects the wider economic impact of the Code, with the IBC providing an orderly exit for firms that had failed long before the process began. However, the Business Standard notes that thousands of avoidance transaction applications involving claims worth over ₹4 trillion remain pending, leaving substantial value locked outside the resolution process.
India's ranking in resolving insolvency improved from 136 to 52 in the World Bank's Ease of Doing Business indicators within three years of the IBC, while global rating agencies acknowledged stronger creditor protection and improved recovery outcomes. The most consequential effect lies outside formal resolution statistics, with more than 32,000 applications involving defaults of about ₹15 trillion being withdrawn before admission, reflecting extensive restructuring in the shadow of the law. The credible threat of insolvency has strengthened repayment discipline across the system, with promoters increasingly settling dues when insolvency proceedings are threatened. However, the Business Standard analysis reveals that Part III of the Code, which extends insolvency resolution to individuals and partnership firms, remains largely unimplemented after a decade. The IBC's success is not just limited to formal resolutions but also to the large number of pre-admission withdrawals, which collectively involved an aggregate amount of ₹14.61 trillion, spanning 32,179 companies.
Despite the transformation, significant deficiencies remain. The Business Standard notes that operational creditors are often short-changed while secured financial creditors recover amounts disproportionate to the value of their security interests. In sectors with diffuse stakeholders, particularly real estate, homebuyers frequently remain trapped in prolonged insolvency proceedings, facing delayed possession and uncertain recoveries. The Code has struggled in sectors with diffuse stakeholders, with several resolution processes increasingly resembling debt recovery exercises rather than genuine attempts to restore viable firms as going concerns. IBC experts stress that strengthening institutional capacity and improving execution efficiency are critical to the next phase of reform. The focus must shift towards reducing litigation-driven delays, enhancing the quality and accountability of insolvency professionals, and ensuring timely implementation of approved resolution plans. According to Sonam Chandwani, managing partner at KS Legal & Associates, "The focus must shift towards strengthening institutional capacity and improving execution efficiency."
