What is the Insolvency Resolution Process (IRP)?

Under the Insolvency Bankruptcy Code 2016, the IRP is undertaken by the NCLT (National Company Law Tribunal) when a company defaults on payments due to creditors. The financial creditor, operational creditor, or the company itself can file an IRP application to the NCLT. 

Once initiated, company assets (as per claims) are frozen for 6 months, during which the NCLT shall review and finalise the course of action to be taken. This can be in the form of corporate restructuring, debt resolution, or liquidation. 

Listed companies undergoing these procedures:
  • Are put under Additional Surveillance Measures (ASM) as per exchange guidelines, where 100% margins will be applicable on all trades. 
  • Are not allowed to be traded intraday.
  • Are blocked from fresh buy orders; existing holdings can be sold.
  • Can only be sold on the 1st trading day of the week and hence will be shown in your SELFIE/TraderX portfolio only on days they are allowed to be traded. However, these holdings can be viewed in MyGeojit on any day.

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