Share of real estate in recoveries under IBC rises to 18.8%: Report
The real estate sector on a reported basis accounted for more than 50% of the total realizations under IBC (Insolvency and Bankruptcy Code). However, subsequent to release of data by IBBI, a large key case went sub-judice following admission of an appeal before the Hon’ble NCLAT, resulting in the real estate sector accounting for 18.8% of total realizations under IBC. This compares very well to total realizations of 1.2% in the period between its inception in FY17 and September 2022 as indicated in an earlier report, finds a joint report by property consultants ANAROCK and leading law firm Khaitan & Co.
Shobhit Agarwal, MD & CEO, ANAROCK Capital, said, “The total number of corporate insolvency resolution process (“CIRP”) cases filed has risen from an average of ~208 in FY22 to an average of ~313 in FY23. FY24, however, has commenced on a weak note with 238 cases admitted overall in the first quarter. Real estate cases have averaged about 18-20 in each quarter between October 2021 and December 2022. However, this jumped sharply in March 2023 to 44 corporate debtors being admitted into CIRP.”
Sudip Mullick, Partner, Khaitan & Co, said, “While CIRPs of real estate companies have increased in the last few quarters, it would be interesting to see how effectively these cases are resolved. Positive outcomes in the ongoing CIRPs of real estate companies would be the key to drive confidence of homebuyers and give a boost to the sector.”
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One of the key reasons for prolonged delay in resolution of insolvencies has been the large number of vacancies in the NCLTs. “With a view to strengthen the bench, the government has recently appointed 21 members, which
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