The debt burden on the leading real estate companies in India has witnessed a substantial decline of 43% over the past three years, according to a report by Anarock, a real estate consultant. In FY 2019-20, the combined net debt of the top 8 companies in the sector amounted to around Rs 40,000 crore, which has now decreased to Rs 23,000 crore in FY 2022-23. Anarock attributes this positive development to the significant demand for housing, which has contributed to the reduction in debt for these companies.
Real Estate Companies in India Witness 43% Reduction in Debt over Three Years
Anarock’s analysis focused on the financial performance of major residential real estate developers, including DLF, Macrotech Developers (Lodha Brand), Godrej Properties, Prestige Estate Projects, Sobha, Brigade Enterprises, Puravankara, and Mahindra Lifespace Developers Limited.
Anarock Attributes Positive Trend to Strong Housing Market in India
Anuj Puri, the chairman of Enrock, expressed his views on the matter, stating that the decline in gross debt was expected as sales and revenue increased. He highlighted that sales have surpassed pre-Covid-19 levels and are reaching new heights, indicating positive growth for the industry. The average cost of debt for the top eight companies also saw a decline, dropping from 10.3% in 2019-20 to 9% in 2022-23, with interest rates of 9.05% in FY 2020-21 and 7.96% in FY 2021-22.
