As land prices climb in Mumbai, Delhi-NCR and Bengaluru, small and mid-sized developers are increasingly bidding for insolvent real estate companies through the NCLT process, treating distressed portfolios as an alternative route to land and project access.
Land acquisition has long been the single biggest constraint for real estate developers operating in India's major cities. Increasingly, that constraint is no longer just about finding an available parcel, but about finding one priced low enough to keep a project financially viable.
This shift is pushing developers toward an unconventional route to growth. Rather than competing solely for fresh land, redevelopment sites or outright company acquisitions, a growing number of small and mid-sized developers are bidding for real estate and hospitality companies going through insolvency proceedings. The appeal lies in what a distressed company can offer in one package: land, development rights, an ongoing project, and an established position in a market where entry is otherwise expensive.
Recent NCLT orders across Mumbai, Delhi-NCR and Jaipur point to a growing pipeline of such resolutions, in markets where land is scarce and prices are high.
Real estate accounts for over a fifth of insolvency cases
Real estate remains the second-largest contributor to India's insolvency caseload after manufacturing. According to CareRatings' Q3 FY26 report on IBC recovery rates, real estate accounted for 22 per cent of cumulative CIRP admissions, behind only manufacturing at 37 per cent — a share that has held broadly steady over recent quarters.
For lenders, insolvency remains primarily a recovery mechanism. For an acquiring developer, the same process is increasingly functioning as a deal pipeline for land and project access.
Distressed does not mean discounted
A company entering insolvency does not guarantee its land or projects are unencumbered or cheap. Buyers must still evaluate land titles, pending statutory approvals, litigation, outstanding construction obligations and creditor claims before bidding. Winning a resolution plan does not automatically make a stalled project profitable, particularly since the underlying asset typically comes attached to homebuyers awaiting possession, unpaid contractors and lenders holding security interests.
Recent deals show the shape of these transactions
Two recent NCLT orders illustrate both the scale and the complexity involved. The Mumbai bench approved a ₹352.5 crore resolution plan for Radius & Deserve Land Developers, submitted by Bharadvaja Buildcon LLP, a joint venture under Aspect Group. The sole financial creditor, IDBI Trusteeship Services, held an admitted claim of ₹3,255.82 crore — but rather than a cash payout, the plan settles the claim through an allotment of constructed area in the company's Slum Rehabilitation Authority project at Magathane, leaving the creditor to recover only about 11 per cent of its dues.
In Jaipur, Oriental Structural Engineers won a competitive, seven-round bidding process for Accil Corporation, the owner of the Holiday Inn Jaipur City Centre, with a resolution plan valued at ₹288.37 crore against the asset's fair value of roughly ₹269 crore. Five prospective resolution applicants had submitted plans before the Committee of Creditors settled on Oriental Structural Engineers' bid.
Elsewhere, the IBBI's public filings show resolution plans for Amar Prakaash Developers and Siddhi Raj Housing Projects — the latter tied to a residential redevelopment site in Mumbai's Worli — both cleared in mid-2026, pointing to a steady stream of real estate insolvencies reaching resolution rather than liquidation.
Regulatory framework is catching up
An IBBI committee has proposed that insolvency proceedings for real estate companies be handled project-wise rather than pulling a developer's entire portfolio into resolution when only one project has defaulted. The panel has also floated project-wise escrow accounts and mechanisms for consolidating land and development rights — changes that could make distressed real estate acquisitions more structured going forward.
Outlook
The trend points to a broader consolidation within Indian real estate, with developers that have stronger balance sheets and execution capability increasingly acquiring weaker or distressed players instead of competing purely for new land. For homebuyers in stalled projects, a change in ownership can bring fresh capital and a stronger chance of completion, though it does not erase a project's prior legal or financial history.
