From Videocon to Subhash Chandra: How India’s biggest debt settlements stack up

“I have not borrowed any money from any lender,” Zee Group founder Subhash Chandra said on Thursday, clarifying that he was only a personal guarantor for borrowings raised by companies associated with the Essel Group. His statement came after the National Company Law Tribunal approved a ₹6.5-crore repayment plan in his personal insolvency proceedings against admitted claims of ₹21,696 crore.

Chandra also pushed back against the ₹22,006-crore figure being cited in reports, saying, “All the numbers being quoted in the reports as judgement are taken from the documents as total claims filed. It does not represent the current status.” He said the underlying borrowing entities had repaid around ₹43,000 crore since January 2019.

The development nevertheless puts the spotlight on the unusually low recovery proposed under Chandra’s personal insolvency plan and raises a broader question: how does it compare with some of India’s biggest debt settlements and insolvency resolutions?

What Chandra’s ₹6.5-crore plan covers

The plan provides ₹6.25 crore for creditors and ₹25 lakh towards insolvency process costs. It secured 80.814% of the creditor vote. Chandra said the ₹22,006 crore figure represents guarantees given for corporate borrowings, rather than money personally borrowed by him.

He said lenders currently objecting to the plan had filed claims totalling ₹3,992 crore, of which ₹620 crore had already been settled. The underlying borrowing entities have offered about ₹1,113 crore to multiple lenders in this group.

A separate group of lenders had claims of ₹16,386 crore, of which ₹16,201 crore was admitted. Chandra said these borrowing entities were also in the process of settling the remaining amounts.

From Videocon to Siva Industries

Even with Chandra’s clarification, the ₹6.5-crore payout is striking when measured against the admitted claims in his personal insolvency case.

The closest large-scale comparison is Videocon. In 2021, Twin Star Technologies, backed by Vedanta’s Anil Agarwal, secured approval for a resolution plan involving 13 Videocon Group companies. Against admitted claims of ₹64,838.63 crore, the plan provided ₹2,962.02 crore, implying a recovery of 4.15% and a haircut of 95.85%.

The NCLT had itself raised concerns over the low recovery, observing that the resolution applicant was “paying almost nothing”. Operational creditors faced an even steeper 99.28% haircut.

Siva Industries and Holdings provides another comparison, although through a different route. A promoter-backed proposal offered lenders about ₹323 crore against dues of roughly ₹4,863 crore, implying a recovery of around 6.6% and a haircut of about 93.4%. The proposal was made under Section 12A of the Insolvency and Bankruptcy Code.

The cases are not identical: Chandra’s is a personal-guarantor repayment plan, Videocon involved corporate insolvency resolution, while Siva Industries involved a promoter-backed settlement proposal. But the numbers underline the scale of the difference.

Videocon’s 4.15% recovery was more than 130 times Chandra’s roughly 0.03% recovery if the ₹21,696-crore admitted claims are compared with the ₹6.25 crore earmarked for creditors. At Videocon’s recovery rate, the claims would hypothetically have generated about ₹900 crore, rather than ₹6.25 crore.

Mallya brings his own debt battle into focus

The Chandra case also drew a reaction from Vijay Mallya, who used the development to question the treatment of borrowers in India’s debt-recovery system.

Mallya said banks and the government had admitted to recovering ₹14,100 crore from him against a “judgement debt” of ₹6,203 crore, and contrasted that with Chandra’s repayment plan.

The comparison, however, is not directly like-for-like. Mallya’s ₹14,100-crore figure relates to recoveries from assets linked to his case and should not be described as money personally repaid by him. His proceedings also involve Kingfisher Airlines’ bank loans, guarantees and asset-recovery actions, rather than a personal insolvency repayment plan like Chandra’s.