India’s insolvency framework, via the Insolvency and Bankruptcy Code (IBC), is reviving distressed housing schemes as financially strong developers take over. With 1.4 lakh buyers closer to possession and reforms prioritising project completion, the process aims to finish stalled projects and restore buyer confidence across major cities.
India
-Oneindia Staff
India’s insolvency framework is emerging as a lifeline for homebuyers trapped in stalled housing projects, with more than 1.4 lakh buyers now closer to receiving possession as financially strong developers take over distressed developments through the Insolvency and Bankruptcy Code (IBC).
According to industry estimates, nearly 2.5 lakh homebuyers are linked to 553 real estate insolvency cases admitted under the IBC so far. Of these, only about 17 per cent have reached resolution, while 1.1 lakh homebuyers across 221 cases are still waiting as their cases move through judicial forums. Resolved projects account for roughly Rs 84,000 crore in investment, with another Rs 65,000 crore still locked in unresolved developments.
India’s insolvency framework, via the Insolvency and Bankruptcy Code (IBC), is reviving distressed housing schemes as financially strong developers take over. With 1.4 lakh buyers closer to possession and reforms prioritising project completion, the process aims to finish stalled projects and restore buyer confidence across major cities.
Homebuyers gained recognition as financial creditors under the IBC in 2018 — a shift that has made insolvency proceedings an increasingly common route to unlock stuck housing projects.
Reforms on the way
The Insolvency and Bankruptcy Board of India (IBBI) has recently proposed reforms aimed at prioritising project completion over liquidation, including project-wise insolvency proceedings, ring-fencing of project cash flows, simpler claims processes, and closer coordination between RERA authorities and insolvency courts. Analysts note that litigation delays and repeated appeals continue to slow down resolutions, and that gaps between NCLT approval and actual execution can strain project economics, since developers often have to deliver homes at prices fixed years earlier despite rising construction and financing costs.
Adani Realty among developers leading revivals
Large, well-capitalised developers — including Adani Realty, Lodha and others — have stepped forward to acquire and complete distressed projects, bringing in fresh funding and execution strength that stalled developments had long lacked.
Adani Realty’s turnaround of Take Ten BKC, a luxury residential project in Mumbai’s Bandra-Kurla Complex that had been stuck since 2020, stands out as a notable example. The project had left 176 original MHADA families and hundreds of other buyers in limbo. Through an NCLT-led resolution, Adani Realty committed over Rs 1,000 crore to the project — including more than Rs 400 crore in fresh capital — and arranged nearly Rs 1,200 crore in construction financing. The project has since handed over completed homes to 903 buyers.
In a separate BKC project, Adani Realty also took charge of the long-pending Bharat Nagar Slum Rehabilitation Project after the collapse of HDIL, which had left behind negative cash flows and unpaid dues to slum dwellers. Construction has now resumed, with rehabilitation housing underway for nearly 1,000 families.
Other developers have delivered similar turnarounds elsewhere in the National Capital Region. In Gurugram, the Hills-77 project was revived, enabling 724 homebuyers to get possession, while the Centre Court project — carrying claims of about Rs 1,250 crore — secured its occupancy certificate after resolution, benefiting more than 300 buyers following the original developer’s default.
Industry voices
Nikhil Bhatia, Managing Director – Land & Capital Markets, CBRE India, noted that real estate resolutions under the IBC tend to move slower than other sectors due to the structural complexity of long-gestation projects with layered claims involving homebuyers, lenders and land partners, requiring patient capital and a longer investment horizon — though steady end-user demand and firmer pricing have recently made more stalled assets viable to complete.
Gulam Zia, International Partner and Senior Executive Director at Knight Frank, pointed out that real estate makes up 22 per cent of all CIRP admissions — the second-largest share by sector — with resolution plans on average realising close to 95 per cent of assessed fair value. He said large developers such as Adani, Reliance, JSW and Prestige are increasingly using the IBC route to acquire distressed platforms and projects, gaining access to land and development potential while bringing the capital and execution capacity needed to finish them — ultimately benefiting stuck homebuyers who are finally getting possession of their homes.
Real estate expert Vishal Bhargava described the NCLT process as a boon for buyers trapped in stalled projects, adding that while no resolution plan is flawless, it has restored buyer confidence — particularly as major developers like Adani and Lodha take over, revive and deliver stalled housing, often proving more effective than prolonged litigation.
The IBC route has also enabled expansion in commercial real estate, with Oberoi Realty and a consortium acquiring Hotel Horizon in Mumbai, and Macrotech Developers using the process to take over V Hotels.
