Group insolvency: IBC’s next frontier or flaw?

The Insolvency and Bankruptcy Code (Amendment) Bill, 2025, introduced in Parliament during the monsoon session, seeks to plug a major gap in India’s insolvency regime. It proposes a new Chapter VA on group insolvency — a long-awaited reform on business groups that operate through layers of holding companies, subsidiaries, and associates. Until now, fragmented proceedings against individual entities in such groups have historically led to conflicting outcomes and value erosion. A coordinated approach is essential to preserve enterprise value and ensure efficient resolutions.

However, the Bill’s design raises concerns about excessive delegation of power to the executive, in a manner reminiscent of “Henry VIII clause” — allowing the government to modify primary law through subordinate rules.