November 24, 2015

Realtor debt worth Rs. 30,000 crore facing refinance risk: Crisil

India’s top 25 realtors, accounting for 95 per cent of the market capitalisation of the sector, stare at high refinancing risk of debt obligations worth as much as Rs.30,000 crore, as demand in their respective market is expected to remain tepid over the medium term, according to an analysis by Crisil.

“These 25 developers account for half of bank lending to the real estate sector. And most of those facing high refinancing risk are in the National Capital Region (NCR),” Sushmita Majumdar, Director, CRISIL Ratings, said in a statement.

According to Crisil, stagnating collections in the wake of declining sales velocity had resulted in debt taken for residential projects by these developers surging by 25 per cent to Rs.61,500 crore in fiscal 2015. “Saleability of projects has also been declining, especially in north India. Another area of concern is inventory, which surged to 58 and 48 months, respectively, in the north and west at the end of fiscal 2015. South India had a more comfortable 22 months of inventory.”

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