Real Estate: Debt burden on the top 8 real estate companies has reduced by 43% in three years. The total debt burden on the top 8 companies in the real estate sector was approximately 40,000 crore rupees in the financial year 2019-20, which decreased to 23,000 crore rupees in the last financial year 2022-23. This information is based on a report by real estate consultant Anarock. Anarock revealed that the heavy demand for homes has helped reduce the debt burden on real estate companies.
Reasons for the decrease in debt:
According to Anarock, the strong demand for homes across the country has enabled major listed developers to reduce their debt. Anarock analyzed the financial performance of the top 8 companies working in the residential real estate sector, including DLF, Macrotech Developers (Lodha brand), Godrej Properties, Prestige Estate Projects, Sobha, Brigade Enterprises, Puravankara, and Mahindra Lifespaces Developers Limited.
Chairman’s statement:
The net debt of these top eight listed real estate companies has decreased from 40,500 crore rupees in the financial year 2019-20 to about 23,000 crore rupees in the financial year 2022-23. The average cost of debt for these eight companies has decreased from 10.3% in 2019-20 to 9% in 2022-23. The interest rate was 9.05% in the financial year 2020-21 and 7.96% in the financial year 2021-22.
Anuj Puri, Chairman of Anarock, said, “The reduction in overall debt was expected due to increased sales and higher revenues.” He also mentioned that sales have surpassed pre-COVID-19 levels and are continuing to reach new heights.
