The top eight listed real estate developers in India have made remarkable progress in reducing their net debt, trimming it by over 54% in the first quarter of the current fiscal year (FY25) compared to its previous peak in FY19, according to a recent report.
Significant Debt Reduction
The collective net debt of these leading developers has decreased to approximately ₹20,808 crore in Q1 FY25, down from over ₹44,817 crore recorded in Q4 FY19. This substantial reduction highlights a shift in the financial health of these companies, showcasing their ability to manage debt more effectively amid a booming real estate market.
Record Booking Values
The report, prepared by Anarock Group, notes that residential sales have reached new heights across India’s top seven cities in the past year, with buyer demand significantly favoring branded developers. In just the first quarter of FY25, the booking value for these eight listed developers hit ₹26,832 crore.
In FY19, these developers collectively reported a booking value of ₹27,144 crore. The following fiscal year (FY24) saw this figure soar to about ₹90,573 crore, marking an impressive increase of 234% over the period. Notably, the first quarter of FY25 alone accounted for nearly 99% of the total booking value recorded in FY19 and 30% of the total for FY24, with three more quarters remaining in the ongoing financial year.
Insights from Industry Experts
Dr. Prashant Thakur, Regional Director and Head of Research at Anarock Group, emphasized the significance of this data, noting the substantial rise in sales revenue among these developers. Although some companies experienced a slight rise in net debt during this period, they also saw a significant increase in booking values over the year.
The rise in debt for these particular developers is attributed to their aggressive expansion strategies across various geographies, with many engaging in a land acquisition spree in multiple cities. In contrast, the net debt decline among the other players can be largely explained by the considerable uptick in booking values observed over recent quarters.
This positive trend in the Indian real estate sector suggests a robust recovery and growing investor confidence, as developers navigate a dynamic market landscape.
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