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The Supreme Court's criticism of the National Company Law Appellate Tribunal (NCLAT) and National Company Law Tribunal (NCLT) has raised concerns about the quality of members and their impact on the resolution of cases under the Insolvency and Bankruptcy Code (IBC).
The recent judgment by the Supreme Court of India on the time-bound redemption rights of borrowers is advantageous for asset reconstruction companies (ARCs) as it protects genuine auction purchasers, reduces uncertainty, and maintains the sanctity of the auction process.
Indian companies have been witnessing an improvement in credit profiles as low interest rates since 2020 lowered cost of funds and improved profitability. But that has changed since. In the past year, interest rates have soared and inflation has eaten into profit margins.
There were tenders worth Rs 3,40,400 crore in the same period a year ago and Rs 3,38,400 crore in the first quarter of FY24.
The recovery timelines under resolution through the Insolvency and Bankruptcy Code (IBC) route continue to lengthen with those resolved in the second quarter (2Q) of FY23-24 touching an all-time high of 662 days for financial creditors (FCs) with a consistent increase across all creditor classes for the past three years.