Real Estate: Only 16% of Loans to Indian Real Estate is under “Severe Stress,” Says Report

January 14, 2020 | News, Real Estate
https://dailyalts.com/wp-content/uploads/2020/01/gurgaon-1896956_1920-indian-real-estate-anarock.jpg

This statistic in a new report from ANAROCK Capital should be heartening news for beleaguered Indian real estate.

Indian real estate, the poster-child for everything wrong with the Indian economy, may have been treated unfairly.

Consider this from an article last month:

“The real estate sector is caught in the tweezer grip of delayed project deliveries; developers starved of funds, high unsold inventory, and a growing proportion of stalled projects. Unproductive assets in the form of under-construction, stuck or delayed projects are estimated at 560,000 homes worth ₹4.5 trillion ($65 billion) across the top seven Indian cities.”

The headline numbers, therefore, look scary and paint a picture of a sector gripped by a severe financing crunch.

In this context, an in-depth look by ANAROCK Capital at the status of real estate financing in India paints a markedly optimistic picture.

Indian real estate financing: ANAROCK Capital’s report

Key facts from the blog by Shobhit Agarwal, MD & CEO, featured in the report:

  • Over 62% or ~USD 58 Bn of the total loan advances (USD 93 Bn) to Indian real estate by banks and NBFCs/HFCs is currently completely stress-free
  • Another 22% (~USD 21 Bn) is under some pressure. These will likely resolve.
  • Only USD 14 Bn (or merely 16%) of overall lending to Indian real estate is under ‘severe’ stress
  • Out of the above total of USD 93 Bn of loans to Indian real estate, Grade A builders received over USD 65 Bn loan advances, followed by USD 27 Bn to Grade B players – and a mere USD 1 Bn to Grade C developers.
  • Nearly 84% of the overall loan amount by NBFCs/HFCs has little or no stress at all.
  • Going forward, residential sales are likely to pick up as the government is taking multiple measures to revive the sector.

So the cash crunch on Indian realty may lift sooner than what the market envisages.

The Nifty Real Estate Index has likely already broken out of a 10-month consolidation and maybe a harbinger of better fortunes down the line.

(This article is the first part of a two-part article on the Anarock report. The second part will cover the PE trends in the Indian Real Estate sector)

Related Story:  Alternative Investments: CPPIB Commits $600 Million to Indian Infrastructure

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Shape

Latest Alternative Investment News

https://dailyalts.com/wp-content/uploads/2022/01/Bink-app-shot.png
FinTech: Lloyds To Acquire Stake In Loyalty App Bink
January 4, 2022     FinTech, News

Lloyds Banking Group (LON: LLOY), Britain’s biggest mortgage provider, will acquire a minority stake in loyalty app Bink, according to a report by Sky News for an undisclosed amount that…

https://dailyalts.com/wp-content/uploads/2022/01/Screenshot-2022-01-04-at-22-29-49-Screenshot-Pawson-2.png
Digital Assets: Coinbase CEO Armstrong Said To Have Splurged $133M On Home In LA
January 4, 2022     Digital Assets, News, Real Estate

An iconic property in Bel Air, Los Angeles, designed by internationally acclaimed English architect John Pawson changed hands last month for $133 million and the buyer was Coinbase (NASDAQ: COIN)…

https://dailyalts.com/wp-content/uploads/2022/01/47752022922_e4569a2f0e_c.jpg
Alternative Investments/ESG: VegTech Invest Launches Plant-Based Innovation & Climate ETF

VegTech Invest advisory has launched the VegTech Plant-based Innovation & Climate ETF (Ticker: EATV), its first financial product. The ETF offers exposure to publicly traded companies actively innovating with plants…

https://dailyalts.com/wp-content/uploads/2022/01/Screenshot-2022-01-04-at-18-48-26-超·世界.png
Venture Capital: Chinese AI Startup Parametrix Raises $100M, Turns Unicorn
January 4, 2022     Artificial Intelligence, News, Venture Capital

Chinese AI company Parametrix.ai has raised $100 million in a Series B round led by Sequoia China and joined by existing investors 5Y Capital and Gaorong Capital. Though the valuation…