New Delhi: The proposed amendments to India’s Insolvency and Bankruptcy Code (IBC) are expected to help shorten resolution timelines and improve recovery rates, but they still don’t address long standing challenges related to the real estate sector, rating agency ICRA said.
The suggested changes offer greater flexibility in resolution plans and procedural streamlining, helping creditors reduce the delays that are a regular feature of insolvency proceedings.
Though ICRA expects these recommendations made by the Lok Sabha Select Committee (SCLB) and the Ministry of Corporate Affairs (MCA) to strengthen the nine-year-old IBC framework, the reforms are expected to be limited mostly to non-real estate cases.
“Real estate sector-specific reforms have not been addressed in the current proposals despite the fact that the real estate and construction sector has the second highest share in cases ongoing in CIRP,” the agency said in a press release.
According to ICRA, real estate insolvencies continue to account for a significant share of unresolved cases, and delays in addressing them could drag down the overall number of cases resolved under the Code.
Despite this, key amendments, including creditor-initiated insolvency, group insolvency and cross-border insolvency, could help improve outcomes, especially for companies with diversified operations.
So far, almost Rs. 4 lakh crore has been recovered through the IBC, despite lenders having to face steep haircuts, and only about 32% claims being admitted on average till September 2025.
Manushree Saggar, Senior Vice President and Group Head, Structured Finance Ratings, ICRA, said:“ The recommendations of SCLB, if passed, are expected to improve recovery rates and reduce timelines for the CIRP process under IBC.”
