Revamping Indian Real Estate: How Amendments to Insolvency Laws Promote Resolving Projects?

From an optimistic future outlook, the Indian real estate market appears bright. According to a Concorde analysis, the real estate industry is expected to develop at a robust 9.2% CAGR between 2023 and 2028. By 2030, the Indian real estate market is projected to be worth USD 1 trillion, and by 2025, it is anticipated to account for 13% of the nation's GDP.

However, the Indian real estate sector has long grappled with challenges ranging from delayed projects to disputes between developers and homebuyers. Amidst this backdrop, amendments to India's insolvency laws have emerged as a potential game-changer in transforming the real estate landscape. As per the IBBI Quarterly Newsletter, as of 31 December 2023, ~21% of insolvency processes comprise the resolution process, ~14% of insolvencies received resolution plans and ~18% of cases admitted to liquidation pertain to the real estate sector. As per latest Anarock's Report on "Update on IBC in Indian Real Estate "share of real estate in recoveries under insolvency and bankruptcy code rose to 18.8%. These numbers signify the importance of the sector.

Thus, the regulator brough amendments, aimed at promoting the resolution of distressed projects on a case-by-case basis, signal a significant shift towards safeguarding stakeholder interests and revitalizing the sector.