Builders Turn to Insolvency Deals as Land Costs Soar.

Distressed developers are emerging as a strategic route to projects, development rights and valuable urban assets.

Small and mid-sized real estate developers are increasingly turning to insolvency proceedings to acquire distressed property companies as land prices continue to rise across major urban markets. Instead of competing for expensive land parcels, developers are bidding for companies that offer existing projects, development rights and, in some cases, valuable urban assets. The trend is particularly visible in Mumbai, Delhi-NCR and Bengaluru, where land availability is limited, and redevelopment competition is intensifying. Recent NCLT approvals for multiple real estate acquisitions highlight growing investor interest in distressed assets. However, these deals come with significant risks, including unclear titles, approval issues, litigation, creditor claims, construction obligations and stalled execution. Experts stress that thorough due diligence is essential before acquiring such assets. With nearly 22% of companies admitted under India’s insolvency process belonging to the real-estate sector, distressed property is increasingly becoming an acquisition opportunity—not merely a recovery exercise.