Recovery By ARCs In Stressed Real Estate Seen Rising To 38% In 2025-26: Crisil

Debt recovery by asset reconstruction companies (ARCs) from stressed real estate projects is likely to improve to 38% in 2025-26, up from 22% a year ago, helped by stronger housing demand post COVID and strategic debt restructuring, Crisil Ratings said Monday.

Restructuring measures, such as moratoriums and sustainable repayment plans, have enabled developers to redirect cash flow toward completing pending projects, the agency said in a press release.

The findings are based on an analysis of 70 stressed projects involving security receipts worth ₹108 billion across Bengaluru, the Mumbai Metropolitan Region, and the National Capital Region. Most of these projects were bogged down by weak sales, delayed collections, and funding shortages. But with rising property prices and stronger demand, many of them are now drawing interest from external investors, Crisil said.

Residential demand in these three regions is expected to grow 7–9% in 2025-26, the agency added.
Around two-thirds of the analysed projects fall in the mid-premium and premium segments, with units priced at ₹8 million or more.

These are seen contributing 80% of overall recoveries, supported by steady demand. In contrast, the affordable housing segment—projects under ₹4 million—is likely to play a smaller role in recoveries amid modest demand.

“ARCs are likely to benefit from developers adding close to 2.5 million square feet of new inventory this fiscal,” said Mohit Makhija, senior director, Crisil Ratings.

“With 40% of rated projects nearing completion, investor appetite for last-mile funding is picking up—especially in the premium segment. Offering slightly discounted prices for near-ready units could further lift sales.”