Business Failure & Recovery

Corporate Insolvency Takes Far Longer Than the Law Allows, and Creditors Recover a Fraction

When a company cannot pay, resolving it takes far longer than the law allows and creditors get back a fraction of what they are owed. The average corporate insolvency resolution took 744 days as at 31 March 2026, up from 713 a year earlier, and 78 per cent of ongoing cases had passed the 270-day mark. Recovery depends entirely on which measure is used, and this entry records that rather than choosing one: the Insolvency and Bankruptcy Board's cumulative record is about a third of admitted claims, the Economic Survey reports recovery rising from 28.3 per cent in 2023-24 to 36.6 per cent in 2024-25, and ICRA reports roughly 31 per cent in successful resolution plans against about 4 per cent in liquidations. ICRA also reports a separate overall-recovery measure of 23 per cent for 2025-26 against 46 per cent for 2024-25; it differs from the measures above because they use different bases and definitions, and none of them is interchangeable with another. Large cases dominate whichever measure is used: claims above ₹1,000 crore accounted for 95 per cent of the value recovered in 2025-26 from 8 per cent of approved plans, which implies smaller creditors fare worse than any average suggests.