Nearly 46% of the cases admitted in the real estate sector as of June 2024 has been successfully resolved because of the Insolvency and Bankruptcy Code (IBC), the latest data by the Insolvency and Bankruptcy Board of India (IBBI) showed.
Of the 1,400 admitted insolvency cases for real estate and construction companies, 645 have been rescued while 261 ended up in liquidation. Creditors had realised Rs 3.4 lakh crore from resolution plans. This is a recovery of 32 per cent against the total admitted claims having a haircut of about 68 per cent.
“The rescued companies are around 2.5 times of those liquidated…By providing a structured framework for insolvency resolution, empowering homebuyers and ensuring time-bound process, IBC has instilled a sense of hope among stakeholders,” said Ravi Mittal, chairperson IBBI, said in the April-June newsletter.
The government has taken various steps to resolve the issue including giving homebuyers the status of financial creditors, keeping units already in possession out of the liquidation process, allowing project-wise insolvency resolution and making homebuyers resolution applicants.
The IBBI chief said despite the challenges, IBC’s success in resolving high-profile real estate cases highlights its potential to bring positive change to the sector.
