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
Technology

AirBrick Infra Sets Rs 1 billion Target, Expands to Dubai and Tier-II Cities

AirBrick Infra, one of India’s fastest-growing AI-led commercial interior design and build firms, has announced a sales order target of Rs 1 billion for FY 2025–26. The projection represents a 50 per cent growth over the previous fiscal year and reflects rising demand, increased repeat business, and the company's robust tech-first delivery model.  Now in its third year of operations, AirBrick continues its rapid scale-up, having successfully delivered over 70 projects spanning 3 lakh sq ft in FY 2023–24. FY 2024–25 witnessed the onboarding of several Fortune 500 clients, sett..

Next Story
Resources

Virtusa Foundation Powers Green Education Drive in Bengaluru

The Virtusa Foundation, CSR arm of digital engineering and technology leader Virtusa Corporation, has announced key infrastructure and mobility initiatives at the Ramakrishna Mission, Shivanahalli, Bengaluru. The launch marks the inauguration of a 16-room residential facility for lady teachers and the deployment of two solar-powered electric buses, underscoring Virtusa’s commitment to its core pillars of Education, Environment and Empowerment (3Es).  Located on the forest fringe near Bannerghatta National Park, the initiative supports tribal and underserved communities, complementi..

Next Story
Infrastructure Urban

Godrej Enterprises Drives India’s Smart Green Logistics Shift

As India accelerates its transformation into a global manufacturing and logistics hub, Godrej Enterprises Group (GEG) is taking the lead with its smart, sustainable intralogistics solutions. Through its Material Handling Equipment (MHE) and Storage Solutions businesses, GEG is redefining operational efficiency in modern warehouses and factories using IoT, automation, and AI. GEG has consistently maintained a 20–25 per cent market share in the intralogistics sector over the past three years. Today, over 37 per cent of GEG’s revenues come from its Good & Green portfolio, and its net..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?