While it seems a little crazy, this is how resolutions work. Ruchi soya, a massive loss making co, has been turned around and made 880 cr. net profit in the last 12 months.
Lemme thread my thoughts here.
Thread: Crony Capitalism and Baba Ramdev
Ruchi Soya, a listed company goes into insolvency. They owed Rs. 12146 crores to PSU banks. SBI writes off 933 crores and settles its dues of Rs. 1,816 crore to 883 crores. Other banks - PNB, CBI etc write off more than half their loans