The top 8 large and listed developers in India have experienced a remarkable reduction in net debt by 43 percent, dropping from Rs 405 billion in fiscal year 20 to over Rs 230 billion in fiscal year 23. Despite periodic interest rate hikes, their execution capabilities remain unaffected. The market confidence in these developers has grown, as indicated by the increasing market share of both listed and unlisted players. The last fiscal year witnessed the highest sales volume in five years, with approximately 3.65 lakh units sold across the top 7 cities. This positive trend reflects a thriving real estate market poised for continued growth.
The flourishing demand for housing nationwide has paved the way for a remarkable transformation within the country's leading large and listed developers, as they effectively reduce their debt burdens. An insightful analysis of financial data from the top 8 residential real estate developers reveals a significant decline of 43 percent in net debt, plunging from Rs 405 billion in FY20 to over Rs 230 billion in FY23. Notably, the developers' debt levels have remained relatively stable on a yearly basis throughout FY23, demonstrating their resilient financial standing.
The chairman of Anarock Group, Anuj Puri, attributes this impressive reduction in net debt to the developers' remarkable sales performance and robust revenue generation. Even in the aftermath of the pandemic, these developers have managed to exceed pre-pandemic sales volumes, thus substantially diminishing their debt burdens. Moreover, the widening gap between gross and net debt signifies the developers' enhanced financial positions. In FY20, the disparity between gross and net debt amounted to approximately Rs 74 billion, which has now expanded to nearly Rs 152 billion in FY23.
Despite marginal increases in the cost of debt due to periodic interest rate hikes since April 2022, it remains below the pre-pandemic levels of FY20. Importantly, these adjustments have not impeded the execution capabilities of the large and listed developers, reaffirming their steadfast commitment to delivering exceptional projects. An increasing number of homebuyers express confidence in the offerings of these developers, as evidenced by their strong market presence and healthier financial books. This positive trend extends to large unlisted players, who exhibit similar financial patterns.
The market share of unlisted companies, including ATS Green, GM Infinite, Myhome, Piramal, Runwal, Signature Global, Shapoorji Pallonji, Wadhwa Group, Provident Housing, Goel Ganga, and Casa Grande, has witnessed significant growth. Cumulatively, the market share of both listed and unlisted developers has nearly doubled, soaring from 17 percent in FY17 to an impressive 36 percent in FY23.
Anarock Research indicates that the previous fiscal year, spanning from April 2022 to March 2023, witnessed unparalleled sales performance with approximately 3.65 lakh units sold across the top 7 cities. This figure represents the highest sales volume recorded in the past five years. Moreover, the first quarter of the current fiscal year, from April to June 2023, achieved a new milestone with approximately 1.14 lakh units sold, marking the highest-ever quarterly sales.
The prevailing data showcases a robust real estate market, underpinned by the unwavering success of the top developers and their unwavering commitment to meeting the evolving demands of homebuyers. This positive trajectory forecasts a promising future for the industry as it continues to thrive and contribute to the nation's economic growth.
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