NCLT Hyderabad Approves Resolution Plan For Karvy Data Management Services Limited

KDMSL, incorporated on 21.04.2008, is a prominent provider of integrated business and knowledge process services. Its clients include UIDAI (Aadhaar Seva Kendras), SEBI (KRA Services) and Protean E-Gov Technologies Limited. Due to operational inefficiencies, market downturns, and external economic reasons, the company experienced financial difficulties, which led to the initiation of Corporate Insolvency Resolution Process (CIRP).

The consortium of Sangamam Power Projects Private Limited, Sirmour Small Hydro Power Private Limited, and Sharp Ventures Private Limited submitted the resolution plan. The Committee of Creditors approved the plan with 85.29% votes. The plan provides for resolution of outstanding debts, restructuring of KDMSL's operations and implementation of corporate structural changes.

One notable aspect of the resolution plan is that creditors will receive ₹158.56 crore as against the admitted debt of ₹1,265.09 crore. This is a huge reduction of the total debt viz. a 87.47% haircut.

The resolution plan focuses on maximizing the value of assets of KDMSL. The ₹158.56 crore offered under the resolution plan is more than three times the liquidation value of the company.

Another notable element of the resolution plan is the retention of approximately 1,200 employees of KDMSL. The plan includes revised employment terms which are aimed at promoting stability within the company.

Ms. Suhasini Ashok, the erstwhile RP expressed confidence in the plan. “This plan not only secures the interests of creditors, employees, and other stakeholders but also lays down a sustainable path for the company's revival. We are confident that this resolution will set a benchmark for future corporate insolvency cases, particularly in maximizing asset value.”, she said.

Mr. Bendi Raviteja and Mr. Vineeth Reddy Vakiti, counsels for the RP commented, “This is a crucial milestone for KDMSL, as the resolution plan has been crafted meticulously to maximize value for creditors and ensure the long-term sustainability of the company.” The company remained operational as a going concern throughout the CIRP.

The plan will be implemented over the course of 23 months and 20 days. A monitoring committee will oversee its execution.

Case Title: M/S ALLIED HI-TECH INDUSTRIES PRIVATE LIMITED VS. KARVY DATA MANAGEMENT SERVICES LIMITED

Case Number: I.A. (IBC) (PLAN) NO.24 OF 2024 IN CP (IB) No. 25/7/HDB/2022

Date of order:13.12.2024

For Applicant: Shri D.V. Sitaram Murthy, Senior Advocate assisted by Shri Bendi Raviteja, Mr V. Vineeth Reddy, Ms. Udita M, Advocates (VIRA Legal).