Bulk deals: what an investor should check before committing

Benchmark the discount against reality

Bulk discounts are quoted against list price, and list price in a slow project is frequently well above what individual units have actually registered at. A quoted twenty percent discount off a list price that is itself twelve percent above achieved realisation is a much smaller discount than it appears.

The only defensible benchmark is registered transaction data for comparable units in the same project and comparable projects in the catchment. If registered values are not available for the project, that is itself informative — it usually means very little has sold.

Establish who you will be competing with

The most commonly overlooked risk in a bulk deal is that the developer continues selling the same product in the same project, often with better inventory and a marketing budget, while you attempt to exit.

Before committing, establish how many comparable units the developer still holds, what their release plan is, and what price they intend to sell at. Then negotiate protections: a commitment on the developer's minimum price for comparable inventory, a defined release sequence, or a carve-out of specific floors or a tower to reduce direct competition.

Without something of this kind, a bulk buyer is frequently the worst-positioned seller in the project — holding the least desirable inventory, with no marketing machine, competing against the developer's own discounting.

• How many comparable units the developer still holds
• Their planned release sequence and pricing
• Whether you can secure a floor-price commitment on comparable stock
• Whether specific floors or a tower can be carved out to you
• What channel partner access you have, and at what cost

Diligence the developer, not just the deal

A bulk deal in an incomplete project is an unsecured bet on the developer completing it. If they do not, the discount is irrelevant.

That makes developer diligence the substantive work: balance sheet, existing debt and its security, other ongoing commitments against current capacity, delivery record against committed timelines, litigation position, and RERA compliance history. A developer offering an unusually large bulk discount is frequently doing so because they need cash, which is precisely the situation in which completion risk is highest.

It also makes security essential. What happens if the project is two years late, and what do you actually hold if the developer becomes insolvent? These questions should be answered in the documentation, not discovered later.

Have an exit before you enter

Bulk positions are illiquid in a specific way: you hold multiple units in a single project, so your exit depends entirely on that project's and that micro-market's absorption. You cannot diversify out of it, and you cannot exit quickly without a substantial discount.

The exit route should therefore be defined before entry. Selling individual units retail requires a sales capability — channel partner access, marketing, a price ladder — that most financial investors do not have and must either buy or negotiate from the developer. Selling the block to another investor means accepting a further discount. Holding for rent runs into Mumbai's low residential yields.

None of these is unworkable. All of them need to be priced into the entry discount, and frequently the discount on offer does not cover them.