Around Rs 1.35 lakh cr real estate debt under serious pressure
Real Estate

Around Rs 1.35 lakh cr real estate debt under serious pressure

Due to the poor visibility of loan servicing, around Rs 1.35 lakh crore of Real Estate debt is under severe pressure. However, nearly Rs 5.02 lakh crore of total loan advances to real estate firms by banks, Non-Banking Financial Companies (NBFCs), and home financiers are not under stress.

Financial institutions have provided approximately Rs 7.5 lakh crore to developers.

According to the media reports, another 15% (nearly $15 billion) is under some stress but has a range for resolution. While approaching the 2019-end, total real estate loans of almost Rs 7 lakh crore (16%), was seriously stressed.

Despite the damage done by the Covid-19 pandemic over the last year, merely 18% of the $100 billion loan value falls below this category, which is notably better than other significant sectors like telecom and steel.

Separately, banks estimated for the largest share of complete real estate loans with 37%, followed by NBFCs 16%, housing finance companies with roughly 34%, and 13% loans provided under trusteeships.

Although HFCs are much better with 75% and 66%, each. It is not a surprise that around 46% of the entire NBFC lending is on the watch-list. Moreover, nearly 75% of the total lending to Grade A developers is on the safe side.

On the other side, a high amount of realty loans provided to Grade B and C developers need strict observation. Nearly 55% of the loans given to Grade B developers is below the severe pressure and 73% for Grade C developers.

As per the report, NCR and Pune are both high on the pressure with 40% and 39%, each, of the total loan provided to them, followed by Mumbai with 37%.

Image Source


Also read: NAREDCO demands one-time loan restructuring for stuck realty projects

Due to the poor visibility of loan servicing, around Rs 1.35 lakh crore of Real Estate debt is under severe pressure. However, nearly Rs 5.02 lakh crore of total loan advances to real estate firms by banks, Non-Banking Financial Companies (NBFCs), and home financiers are not under stress. Financial institutions have provided approximately Rs 7.5 lakh crore to developers. According to the media reports, another 15% (nearly $15 billion) is under some stress but has a range for resolution. While approaching the 2019-end, total real estate loans of almost Rs 7 lakh crore (16%), was seriously stressed. Despite the damage done by the Covid-19 pandemic over the last year, merely 18% of the $100 billion loan value falls below this category, which is notably better than other significant sectors like telecom and steel. Separately, banks estimated for the largest share of complete real estate loans with 37%, followed by NBFCs 16%, housing finance companies with roughly 34%, and 13% loans provided under trusteeships. Although HFCs are much better with 75% and 66%, each. It is not a surprise that around 46% of the entire NBFC lending is on the watch-list. Moreover, nearly 75% of the total lending to Grade A developers is on the safe side. On the other side, a high amount of realty loans provided to Grade B and C developers need strict observation. Nearly 55% of the loans given to Grade B developers is below the severe pressure and 73% for Grade C developers. As per the report, NCR and Pune are both high on the pressure with 40% and 39%, each, of the total loan provided to them, followed by Mumbai with 37%. Image Source Also read: NAREDCO demands one-time loan restructuring for stuck realty projects

Next Story
Infrastructure Urban

Reliance, Diehl Advance Pact for Precision-Guided Munitions

Diehl Defence CEO Helmut Rauch and Reliance Group’s Founder Chairman Anil D. Ambani have held discussions to advance their ongoing strategic partnership focused on Guided and Terminally Guided Munitions (TGM), under a cooperation agreement originally signed in 2019.This collaboration underscores Diehl Defence’s long-term commitment to the Indian market and its support for the Indian Government’s Make in India initiative. The partnership’s current emphasis is on the urgent supply of the Vulcano 155mm Precision Guided Munition system to the Indian Armed Forces.Simultaneously, the “Vulc..

Next Story
Infrastructure Urban

Modis Navnirman to Migrate to Main Board, Merge Subsidiary

Modis Navnirman Limited has announced that its Board of Directors has approved a key strategic initiative involving migration from the BSE SME platform to the Main Board of both BSE and NSE, alongside a merger with its wholly owned subsidiary, Shree Modis Navnirman Private Limited.The move to the main boards marks a major milestone in the company’s growth trajectory, reflecting its consistent financial performance, robust corporate governance, and long-term commitment to value creation. This transition will grant the company access to a broader investor base, improve market participation, en..

Next Story
Infrastructure Urban

Global Capital Flows Remain Subdued, EMEA Leads in Q1 2025

The Bharat InvITs Association’s industry update for Q1 2025 shows subdued global capital flows, with investment volumes remaining at the lower end of the five-year range despite a late 2024 recovery. According to data from Colliers and MSCI Real Capital Analytics, activity in North America declined slightly, while EMEA maintained steady levels and emerged as the top region for investment in standing assets.The EMEA region now hosts seven of the top ten cross-border capital destinations for standing assets, pushing the United States’ share of global activity below 15 per cent. Meanwhile, in..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?