New Delhi: Hero Electric is moving towards liquidation following the Committee of Creditors (CoC) failing to achieve the necessary 66 per cent majority needed to approve a resolution plan under the Insolvency and Bankruptcy Code. The company’s insolvency journey started back on December 20th, 2024, after an application by operational creditor Metro Tyres Limited. 

Despite attracting nine expressions of interest during the Corporate Insolvency Resolution Process, the case ultimately fell apart when CoC failed to reach consensus. The highest-voted resolution plan secured only 47.66 per cent support, falling quite short of the 66 per cent threshold. 

By the last hearings, about 50 per cent voted for the resolution plan while the remaining members pushed for immediate liquidation. 

With the statutory CIRP period having expired on February 13th, 2026, the National Company Law Tribunal ruled that further continuation of the process would serve no beneficial purpose and erode the brand’s value.

The liquidation process will attempt to recover dues for secured and unsecured financial creditors. The big admitted claims include those of Bank of Baroda (Rs 55.36 crore), South Indian Bank (Rs 17.62 crore), SLK Software (Rs 47.87 crore), IDFC First Bank (Rs 9.43 crore), and Karnation Fund/Mitcon (Rs 8.61 crore). 

Making the liquidation more complex is the pending application regarding alleged fraudulent transactions. Acting on a report from transaction auditor JTST & Co. LLP, the Resolution Professional identified a few transactions as either avoidable or fraudulent under Section 66 (1) of the Code. The NCLT noted that this application remains pending adjudication, and the incoming liquidator will be needed to pursue it along with other recovery proceedings. 

Hero Electric had previously faced allegations of non-compliance with the Phased Manufacturing Programme localisation norms under the FAME II scheme. The Ministry of Heavy Industries reportedly issued a demand notice needing Hero Electric to refund Rs 133 crore in subsidies, showing PMP violations, though the company had disputed the demand. Hero Electric had separately even claimed that the government owed them about Rs 556 crore in pending subsidies. 

The NCLT has appointed Lekhraj Bajaj as the Liquidator, who has been directed to immediately take control of the brand’s records and assets. The powers of Hero Electric’s Board of Directors have stopped, vesting completely in the liquidator.