Real estate comprises a significant portion – more than a fifth – of filed insolvency cases, although approved resolution plans total only 13%, a study by Grant Thornton Bharat showed.
Out of 2,298 Corporate Insolvency Resolution Process (CIRP) cases under the Insolvency & Bankruptcy Code, 518 are related to real estate. Surprisingly, only 78 out of 611 approved resolution plans are from the real estate sector.
“One of the reasons for a lower success rate of insolvency resolutions in the real estate sector is that financial creditors include a large number of home buyers, resulting in time-consuming decision making and consensus building within the committee of creditors,” said Surendra Raj Gang, Partner, GT Restructuring Services LLP.