Proposed changes to the Insolvency and Bankruptcy Code look good. They may boost recovery rates and cut resolution times. Yet ICRA says they skip deep-rooted problems in real estate. That sector still holds the second-largest chunk of corporate insolvency cases.
“Real estate and construction lack targeted fixes in these plans. Yet they make up the second biggest slice of active CIRP cases,” ICRA stated.
In its release, ICRA said Lok Sabha Select Committee and Ministry of Corporate Affairs ideas will firm up the IBC. Gains will mostly hit non-real estate cases.
The firm stressed no real estate or construction reforms appear. The sector dominates many live insolvency files as of September 30, 2025.
ICRA added that safeguarding homebuyers and finishing stuck housing jobs top government goals. So real estate needs custom fixes.
The IBC hit its ninth year in October 2025. It has pulled in about ₹4 lakh crore in recoveries. Results beat other recovery paths, ICRA noted.
Lenders still take big losses. Successful plans recover just 32 percent of claims through September 2025.
ICRA said IBC recovery times have stretched out. Rates fell in early FY2026 after gains in late FY2025. By September 30, 2025, three-quarters of CIRP cases topped 270 days since start. That’s past the legal limit, per National Company Law Tribunal data.
Saggar said, “If SCLB ideas pass, they should lift recovery rates and trim CIRP times under IBC.”
Over 30,000 IBC cases waited at NCLT in March 2025. At today’s pace, clearing them takes over ten years.
ICRA listed top changes like group insolvency, cross-border cases, creditor starts, and multi-asset plans. These aid firms with varied assets most.
Boosting NCLT and NCLAT power stays key to quick wins from reforms. (ANI)