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Indian Real Estate Developers at Risk as Credit Dries Up

Infra News - Published on Thu, 18 Jul 2019

Image Source: images.financialexpress.com
Bloomberg reported that Indian developers are at risk of going belly-up as mounting stress in the nation’s credit market dries up funding even for those willing to pay decade-high rates. Mr Amit Goenka, managing director of Nisus Finance Services Co, which lends to developers, said that “With the worsening shadow-banking crisis, borrowing rates for most developers have surged to the highest in more than a decade, in some cases about 20%. Even at that cost, capital availability is limited.”

Mr Goenka said that borrowing costs have increased by about four percentage points over the past year and the funds pool for developers is now one-fifth of the previous year’s average. The cash crunch has raised questions around solvency of real-estate companies, and threatens to push 70% of them out of business in the next 2 years, Goldman Sachs Group Inc said in a note last week.

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Posted By : Mohan Sharma on Thu, 18 Jul 2019
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