IBC Route Unlocks Prime Indian Urban Land Amidst Scarcity
Overview
Developers are increasingly turning to the Insolvency and Bankruptcy Code (IBC) to acquire prime urban land in India's major cities. This strategy offers cleaner titles, fewer liabilities, and greater certainty compared to traditional deals, as land availability shrinks and competition grows.
Stocks Mentioned
Buyers are increasingly leveraging the Insolvency and Bankruptcy Code (IBC) framework to secure prime urban real estate across India's metropolitan markets, driven by dwindling land availability and fierce competition.
IBC Facilitates Land Deals
Data from the Insolvency and Bankruptcy Board of India (IBBI) shows a significant trend: by the end of September, 8,659 companies had entered insolvency proceedings. Of these, 1,905 were real estate companies, and approximately 1,472 have already received resolution plans from bidders. This highlights the growing importance of the bankruptcy framework in India's property market.
"For buyers evaluating large urban parcels, insolvency-led transactions offer far greater certainty on title, approvals and timelines than conventional land deals," stated Sanjay Daga, MD & CEO of Anex Advisory. He added that execution risks reduce materially once a resolution plan is approved, making these deals attractive for serious developers.
Clean Ownership and Valuations
Ajay Khatlawala, senior partner at law firm Little & Co, noted that assets with all regulatory approvals in established locations are seeing strong demand. Developers are attracted to such assets because the resolution process delivers "clean" ownership, free of legacy liabilities and often at competitive valuations.
Notable Transactions
Large conglomerates have notably used this mechanism to build substantial land banks. In November, Adani Enterprises received lenders' approval to acquire Jaiprakash Associates through a resolution plan valued at over ₹14,500 crore, granting access to 3,985 acres of land across Noida and Greater Noida. Earlier, the Adani group acquired two assets from the defunct developer Housing Development and Infrastructure (HDIL) in Mumbai. In April, Shree Naman Developers' acquisition of Neptune Developers was approved, involving admitted liabilities of about ₹2,119 crore with a revival payment of ₹390 crore. Furthermore, Oberoi Realty's consortium was approved to acquire Hotel Horizon, a prime 1.85-acre land parcel in Mumbai's Juhu locality. In August 2024, an Oberoi Realty affiliate acquired Nirmal Lifestyle Realty under the IBC, with payments around ₹273 crore against claims exceeding ₹748 crore. Macrotech Developers also acquired V Hotels, owner of the Centaur Hotel site on Juhu Tara Road.
