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.

Your next big infra connection is waiting at RAHSTA 2025 – Asia’s Biggest Roads & Highways Expo, Jio World Convention Centre, Mumbai. Don’t miss out!

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 Energy

NLCIL Mines Win Top Honours in 2023–24 Star Ratings

NLC India Limited (NLCIL), a Navratna Central Public Sector Enterprise (CPSE) under the Ministry of Coal, has once again cemented its position as a leader in sustainable and responsible mining, with all five of its operating mines receiving prestigious Star Ratings for 2023–24 from the Ministry of Coal.The Star Rating scheme, introduced in 2019, evaluates mines across seven key parameters, including operational efficiency, environmental stewardship, safety, technological adoption, rehabilitation, and worker welfare. Since the inception of the framework, NLCIL has ensured 100 per cent partici..

Next Story
Infrastructure Energy

GST on Coal Raised to 18 per cent, Compensation Cess Removed

The Goods and Services Tax (GST) Council has approved a hike in the GST rate on coal and lignite from 5 per cent to 18 per cent, while simultaneously removing the additional compensation cess of Rs 400 per tonne, previously levied at 40 per cent. The decision, taken on 3 September, is expected to rationalise the tax structure without raising the overall cost burden on power producers or consumers.According to a statement from the Union government, the move is unlikely to impact electricity prices, as the tax adjustment is designed to be revenue-neutral for buyers. The removal of the cess is ex..

Next Story
Infrastructure Energy

SCCL Mines Win 5-Star National Awards for Excellence

Singareni Collieries Company Limited (SCCL) has been awarded 5-Star ratings at the national level for four of its coal mines for the last financial year, recognising the company’s excellence in sustainable mining, safety, and operational practices.The honoured mines include:RG OC-1 Extension from the Ramagundam-3 AreaJK-5 OC from the Yellandu AreaRK-6 Underground Mine and RK-Newtech Mine from the Srirampur AreaThese awards were presented during the 5-Star Rating Awards Ceremony held in Mumbai, where SCCL Chairman and Managing Director N. Balram received the accolades from Union Minister for ..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?