Insolvency regulator IBBI has commissioned IIM Ahmedabad to undertake a study as to how the IBC’s 650 resolutions (since inception) involving ₹2.7 lakh crore, has led to a change in the economy, IBBI Chairman Ravi Mital said on Thursday.

Giving a sneak preview of the findings of the study — which is expected to be made public in the next two months, Mital said the 650 companies that underwent resolution have seen a “manifold” increase in their sales, EBIDTA, profit after tax (PAT) and market capitalisation post-resolution.

“I hope in the next two months, once this report comes out, we will have a better understanding about what IBC means for resolution,” Mital said at a CII organised conference on the Insolvency and Bankruptcy Code (IBC) in the Capital.

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IBC’s performance in fiscal 2022-23 was much better than that in the previous fiscal.

“We have done better in 2022-23 than in the previous year. Our performance is improving. But there is a lot of room for improvement. If you (creditors) reduce delays by a year, you will gain 5-10 per cent in valuation,” he said. 

Mital also underscored the need to encourage innovation in taking the entire IBC process forward.


Mital urged promoters to initiate early adoption of Section 10 (voluntary liquidation) under IBC, to ensure that they face fewer problems later.

“My experience is that industrialists know when their company is going bad. Why don’t promoters take the initiative under Section 10. The advantage in coming early is that your moratorium starts and debt stops,” he said.

The promoters have given personal guarantees in the majority of cases, Mital said. The Supreme Court ruling in the personal guarantors’ case — which could impact personal guarantees worth ₹ 12.5 lakh crore — is expected in the next two months, Mital said, asking promoters to gear up for the apex court pronouncement that could impact their cases before NCLT.

Put simply, the IBBI Chief has nudged promoters to work on a mechanism that freezes their debt in cases where the payment against guarantee will fall on their head, Shardul Shroff, Executive Chairman, Shardul Amarchand Mangaldas & Co, later told businessline

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“He (IBBI chief) is nudging promoters to go along the route of voluntary liquidation so that the liability on guarantee is capped. It’s a good suggestion. You stop the meter of interest running when you stop the clock through voluntary liquidation by opting for Section 10,” Shroff added.

Shroff also noted that there is still a lot to of space for evolution in the guarantees law.

Ashok Haldia, Chairman, Indian Institute of Insolvency Professionals of ICAI, said in the IBC model, where the creditor is in control, the promoter loses control over the company and faces the consequences, acting as a persuasive force to resort to Section 10 and get the benefit of moratorium available under IBC. “Clarity on the promoter’s personal guarantee invocation in an effective manner will add to that. The promoter, without fraudulent or malicious intention, may take advantage of Section 10 for expeditious resolution,” Haldia said.

Aseem Chawla, Managing Partner, ASC Legal, said a business friendly ecosystem should facilitate bonafide cases of voluntary liquidation, which would unlock capital and bring resources back into the economic mainstream, thereby, ensuring timely payments to lenders and ensuring that the interest of all stakeholders is protected. This gives room for setting up more new businesses, he added.