The real estate sector initially constituted more than half of the total realisations under the Insolvency & Bankruptcy Code (IBC) of 2016, according to reports. However, after the Insolvency and Bankruptcy Board of India (IBBI) released data, a significant case in the sector went into legal proceedings, leading to real estate accounting for 18.8% of total realisations under IBC. This figure stands out compared to the 1.2% total realisations observed from the inception of IBC in FY17 to September 2022, as per a joint report by Anarock and Khaitan & Co.

Shobhit Agarwal, MD & CEO of Anarock Capital, noted a rise in corporate insolvency resolution process (CIRP) cases, increasing from an average of ~208 in FY22 to ~313 in FY23. However, FY24 started weakly with 238 cases admitted in the first quarter. The number of real estate cases in CIRP ranged from 18 to 20 per quarter between October 2021 and December 2022 but surged to 44 corporate debtors in March 2023.

Sudip Mullick, a partner at Khaitan & Co, emphasised the need for effective resolution in these real estate CIRPs to boost homebuyer confidence and the sector. In an effort to streamline the corporate insolvency resolution (CIR) process, the Ministry of Corporate Affairs sought feedback on proposed changes to the IBC.

Kumar Saurabh Singh, Partner at Khaitan & Co, highlighted the prolonged resolution delays due to vacancies in the National Company Law Tribunals (NCLTs). The government's appointment of 21 members aims to address this issue, bringing the bench strength closer to the sanctioned number of 63. Singh also pointed out the proposal to integrate various entities involved in the process onto a single platform, enhancing transparency, reducing delays, and enabling more effective decision-making. Additionally, the National E-Governance Services introduced an insolvency case management system to aid insolvency professionals in executing CIRP and liquidation tasks within defined timelines.