The net debt of top-8 listed developers has reduced from Rs 40,500 crore in FY20 to over Rs 23,000 crore in FY23, recording a decline of 43 per cent in the period. The decline is on the back of boosted real estate sales and revenues, according to a report by Anarock Research.
“On a yearly basis, the net debt of developers has remained almost stable in FY23 as compared to the year-ago period,” according to the report.
Overall, the last fiscal (April 2022 to March 2023) witnessed sales of about 3.65 lakh units across the top-7 cities — the highest in the last 5 years. The first quarter of the current fiscal (April to June 2023) saw approx. 1.14 lakh units sold in these cities — the highest-ever quarterly sales recorded.
Anuj Puri, chairman of Anarock Group, said, “This decline in net debt is essentially because of boosted sales and revenues. These developers’ sales volumes have surpassed pre-pandemic levels and are headed for a new peak. With improved cash flows over the last few years, their debt has reduced significantly.”
He added that the widening gap between the gross and the net debt also indicates a comfortable financial position for these players. For instance, the difference between the gross and net debt of the developers was about Rs 7,400 in FY20 which has widened to almost Rs 15,200 crore in FY23.
The periodic interest rate hikes since April 2022 have led to a marginal rise in the cost of debt, though it remains lower than the pre-pandemic levels of FY20. This, however, will not impact large and listed players’ execution capabilities.
“The findings once again vouchsafe the increasing confidence of most homebuyers in projects by these developers, who have entered the new fiscal with stronger and healthier books and values,” says Puri. “Also, while the top-8 listed developers are on solid financial ground, large unlisted players are also displaying a similar trend.”
The market share of large unlisted companies such as ATS Green, GM Infinite, Myhome, Piramal, Runwal, Signature Global, Shapoorji Pallonji, Wadhwa Group, Provident Housing, Goel Ganga, and Casa Grande, among others. Cumulatively, the market share of large developers, both listed and unlisted, has nearly doubled — from 17 per cent in FY17 to 36 per cent in FY23.
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