The share of real estate in recoveries under the Insolvency and Bankruptcy Code (IBC) rose to 18.8 percent from 1.2 percent between October 2022 and June 2023, a joint report by property consultants ANAROCK and law firm Khaitan & Co found.
The real estate sector on a reported basis accounted for more than 50 percent of the total realisations under IBC.
"However, after the release of data by Insolvency and Bankruptcy Board of India (IBBI), a large key case went sub-judice following the admission of an appeal (in the case of real estate firm Jaypee Infratech) before the National Company Law Appellate Tribunal (NCLAT) resulting in real estate sector accounting for 18.8 percent of total realisations under IBC," the report said.
"The total number of corporate insolvency resolution process (CIRP) cases filed has risen from an average of about 208 in FY22 to an average of about 313 in FY23. FY24 however has commenced on a weak note with 238 cases admitted overall in the first quarter. Real estate cases have averaged about 18-20 in each quarter between October 2021 and December 2022. However, this jumped sharply in March 2023 to 44 corporate debtors being admitted into CIRP," Shobhit Agarwal, MD & CEO, ANAROCK Capital added.
Proposed amendments
To further streamline the corporate insolvency resolution (CIR) process, the report added that the Ministry of Corporate Affairs has invited comments on changes being considered by the IBC.
"Currently, the MCA, the Adjudicating Authority, the IBBI, information utilities and service providers operate on separate technological platforms," Kumar Saurabh Singh, Partner, Khaitan & Co, said. “There is now a proposal to bring all of them on the same platform which will lead to enhanced transparency, minimisation of delays, and facilitate more effective decision-making,” he added.
The National E-Governance Services Ltd., India’s first Information Utility, has also unveiled an insolvency case management system that assists insolvency professionals in seamlessly executing all CIRP and liquidation process-related tasks in a time-bound manner, the report pointed out.
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