LIC HOUSING: BANKS FACE 99.97% HAIRCUT IN INSOLVENCY CASE

A group of lenders, including LIC Housing Finance, had admitted claims of approximately ₹22,006 crore in the insolvency proceedings involving Subhash Chandra.

Under the repayment plan approved by the NCLT, lenders are set to receive only ₹6.5 crore, translating into a recovery of approximately 0.03% of their admitted claims. This implies an extraordinary 99.97% haircut for the lenders. LIC Housing Finance had an admitted claim of ₹1,322.39 crore in the case. Against this amount, the proposed repayment is only ₹38.09 lakh, representing a recovery of roughly 0.028%. The extremely low recovery highlights the significant financial loss faced by lenders on their exposure to the case. Impact: Negative for LIC Housing Finance and other affected lenders — the near-total haircut represents an exceptionally low recovery against the admitted claims and highlights the extent of losses on the exposure.