Real Estate Sector's impact on IBC: Challenges and innovations
Real Estate

Real Estate Sector's impact on IBC: Challenges and innovations

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.

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.

Next Story
Infrastructure Transport

HMRTC to Extend Metro from Gurugram to Jhajjar

The Haryana Mass Rapid Transport Corporation (HMRTC) is progressing with plans to extend the Gurugram Metro from Basai to Bhadsa in Jhajjar, with the ridership survey expected to be completed by the end of January, according to HMRTC officials. In March, the authority had requested Railway India Technical and Engineering Services (RITES) to conduct a ridership survey, which will play a crucial role in finalising the project. The proposed route, covering 23.1 km from Basai to Bhadsa, will alleviate heavy traffic on this stretch. The ridership survey will determine whether the extension should p..

Next Story
Building Material

Siam Cement BigBloc Construction bags Tata Project’s order

SIAM Cement BigBloc Construction Technologies, a joint venture between Gujarat based BigBloc Construction and Thailand’s SCG International Corporation, has secured a work order from Tata Projects for supply and installation of AAC Panels for India’s first Semiconductor unit of Micron India in Sanand, Gujarat. The work order of approx. 2 lakh square feet is for supply and installation of 100 mm AAC panels for Micron India’s semiconductor factory at Sanand. The work order was finalized after several rounds of meetings, thorough due diligence, and factory visits, including review of mock-u..

Next Story
Infrastructure Urban

Zoomlion Releases World's Tallest Straight Boom Aerial Work Platform

Zoomlion Heavy Industry Science & Technology has released a series of groundbreaking aerial work platform (AWP) products, including the world's tallest straight boom aerial work platform, the ZT82J, with a height of 82.3 m. These innovative products further solidify Zoomlion's leadership in the AWP sector and underscore its commitment to global market development. The ZT82J marks Zoomlion's third instance of setting a world record in straight boom AWP following the 68-meter and 72-meter products. The 82.3-meter AWP boasts a platform amplitude of 34.1 meters, a maximum working load of 454 kilog..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000