Bankruptcy

Bankruptcy is a legal process through which an individual or entity that is unable to repay its outstanding debts seeks relief from some or all of its financial obligations under a formal judicial or regulatory framework. In India, corporate insolvency and bankruptcy are governed by the Insolvency and Bankruptcy Code (IBC), 2016 — a landmark legislation that established the National Company Law Tribunal (NCLT) as the adjudicating authority and introduced time-bound resolution (180 days, extendable to 330 days) through a Corporate Insolvency Resolution Process (CIRP). The IBC replaced the fragmented earlier framework and significantly improved India's creditor rights and recovery rates. For individual insolvency, the IBC provides a separate framework. For investors on Ventura Securities, IBC proceedings involving listed companies are critical corporate events — they can result in significant equity dilution, debt restructuring, change of ownership, or liquidation, each of which has materially different implications for shareholders, debtholders, and operational creditors that must be carefully evaluated when trading or holding positions in financially stressed companies.