IBC Resolution Framework Proves Effective: Key Findings from IIM Ahmedabad Research on Post-Resolution Firm Performance

The Insolvency and Bankruptcy Board of India (IBBI) has published the findings of a comprehensive research study conducted by the Indian Institute of Management Ahmedabad (IIM-A), assessing the real-world outcomes for firms that completed the resolution process under the Insolvency and Bankruptcy Code, 2016 (IBC). Issued vide IBBI Press Release No. IBBI/PR/2026/4 dated 19th March 2026, the study offers empirical evidence that the insolvency resolution mechanism has meaningfully contributed to reviving distressed businesses and generating long-term economic value.

Background and Scope of the Study

The research, formally titled "Effectiveness of the Resolution Process: Firm Outcomes in the Post-IBC Period", was carried out by IIM Ahmedabad as an extended follow-up to an earlier study conducted in 2023. That predecessor study had examined firm performance during the post-resolution years spanning 2013 to 2022. The present study expands the analytical window through to 2025, thereby incorporating more recent developments and a richer dataset.

A total of 1,194 firms that had undergone the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 were included in this analysis. The study evaluates performance across multiple financial and operational dimensions over a five-year post-resolution period, offering a longitudinal perspective on firm recovery trajectories.

As the Insolvency and Bankruptcy Code, 2016 approaches a decade since its enactment, this study serves as a timely assessment of whether the legislative framework has fulfilled its core objective of rescuing viable but financially distressed entities.

Key Findings: A Snapshot of Post-Resolution Performance

The study tracked several critical parameters to gauge the effectiveness of the resolution process. Each indicator demonstrates a consistent and positive upward trend in the years following resolution.

1. Revenue Growth — Sales Performance

One of the most striking findings relates to revenue recovery among resolved firms. Average sales recorded an increase of 89% across the five-year post-resolution window, signalling a robust revival in core business operations.

This improvement suggests that new management or restructured ownership — typically taking charge following a resolution plan approved under the Insolvency and Bankruptcy Code, 2016 — has been effective in restoring commercial momentum and rebuilding customer relationships.

2. Operational Efficiency — Asset Turnover Ratio

The Asset Turnover Ratio improved by approximately 131% during the five-year period following resolution. This metric reflects how efficiently a firm deploys its asset base to generate revenue.