Real Estate CIRP explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A developer's balance sheet shows ₹900 crore of project value. The CoC sees the number and expects a substantial recovery.
Then somebody prices the cost of finishing the buildings.
Gross project value is not enterprise value. Net of completion cost, realisability of unsold inventory, recoverable homebuyer instalments and statutory liabilities, a real estate debtor can have a negative net position. Reporting the gross figure without that netting is materially misleading — and homebuyers are financial creditors sitting in the CoC while it happens.
Why this class is different
In an ordinary manufacturing insolvency the assets exist and the question is what they fetch. In a developer insolvency, a large part of the "asset" is unbuilt — and finishing it costs money the estate does not have.
The Land and Building asset class expressly includes all inventory, whether under construction, completed, sold or unsold, which is what makes the exercise a project appraisal rather than a property valuation. Land and building valuation →
The four things that have to be modelled
1. Completion cost. What it costs to finish each tower or phase to the specification promised — construction, approvals, infrastructure, and the common amenities in the sanctioned plan. In a stalled project this is rarely the developer's own estimate, which was prepared to support a launch.
2. Realisability of unsold inventory. Not the price list. What unsold units will actually fetch, in the current market, from a project with a public insolvency and a stalled construction history. Absorption takes longer and pricing is softer than a solvent comparable.
3. Recoverable homebuyer instalments. Buyers who have paid partly have further instalments due, but recovery depends on construction resuming — and on buyers who have watched the project stall for years being willing to pay again. This is a probability, not a receivable.
4. Statutory and other liabilities. Approval dues, development charges, GST exposure, and any charge over the land. Statutory liabilities →
The arithmetic: realisable value of unsold inventory, plus recoverable instalments, less completion cost, less liabilities. Where completion cost exceeds what the remaining inventory will fetch, the net enterprise value is negative — and the honest report says so.
The homebuyer complication
Homebuyers are financial creditors, so they sit on the CoC and vote on the plan that decides their own units. That produces a dynamic no other asset class has: the largest creditor class wants completion, not cash.
Two consequences for the valuation:
Units already sold are not assets. They are obligations. A tower that is 80% sold has 80% of its value already committed to people who have paid.
Buyers in possession are a different question from buyers awaiting handover. A buyer who has taken possession under a completed, arm's length transaction generally cannot be asked to contribute more because the project's economics have deteriorated. A buyer still waiting has, in practice, far less leverage to refuse — which is a commercial reality the valuation should reflect rather than assume away.
The middle case worth flagging: where promised common amenities — a clubhouse, landscaping, internal roads — were never built, there is an argument that buyers have not received the full contracted value, and a proportionate contribution toward completing those amenities can legitimately be sought. That is recovery of undelivered contractual value, and it is different from repricing a completed sale. Whether it is achievable is fact-specific and ultimately for the Tribunal or the court receiver on the facts. Homebuyers as financial creditors →
RERA data is the diligence source
The corporate debtor's own records will not give a reliable picture of what is sold, what is encumbered and what is promised. RERA registrations do better:
- project registration and status, including declared completion timelines;
- units declared sold, against the debtor's internal sales ledger;
- declared encumbrances;
- complaints and orders, which reveal disputes not in the books.
Reconciling the debtor's sales ledger to RERA filings routinely surfaces discrepancies — units sold twice, units shown unsold that are committed, buyers who have paid without a registered agreement. IBC and RERA interaction →
Key takeaways
- Gross project value is not enterprise value. Net it or mislead.
- Completion cost is the variable that decides everything.
- Sold units are obligations, not assets.
- Recoverable instalments are a probability, not a receivable.
- Negative net value is a legitimate conclusion — report it.
- Buyers in possession under completed sales generally cannot be repriced.
- Reconcile the sales ledger to RERA filings. The gaps are the findings.
Read next
- Land and Building Valuation Under IBC
- Homebuyers as Financial Creditors Under IBC
- IBC for Real Estate Companies: RERA Interaction
- Circle Rate vs Market Value in IBC Valuation
Disclaimer: Positions stated as on 5 September 2026. Homebuyer entitlements are fact-specific and continue to be litigated — take advice on any particular project.