Listed real estate developers’ net debt declines 37 pc amid Covid

NEW DELHI: According to an ICICI Securities report, it states the net debt levels of listed real estate developers have declined 37 percent since the first wave of Covid-19. The report noted that the decline in debt levels has been achieved through a combination of reduction in cost of debt by 80-160 basis points, reduction in corporate overheads by 20-40 percent from pre-Covid levels, operating cash surpluses, asset sales and equity capital raise either through the QIP route or through dilution at the SPV level. "On an aggregate basis, listed developers in our coverage universe (ex-REITs) have been able to bring down their consolidated net debt levels by 37 percent to Rs 274 billion (ex-DCCDL) between Q4FY20-Q1FY22 (March 20 to June 21)," it said.

While the overall real estate sector in India, especially the unlisted space, continues to grapple with high cost and quantum of debt, listed developers' balance sheets have become leaner which puts them in a strong position to invest for growth in the medium term and is likely to accelerate the pace of consolidation in the sector. The report noted that developers have used a mix of organic and inorganic routes to reduce debt.

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