Last year, the sector had about Rs. 88,000 crore debt.
The Reserve Bank of India has indicated the realty sector posed “some concerns” given the large and growing share of these loans in the credit portfolio of banks. It said in one of its reports that the asset quality in this segment could come under further pressure given the increasing interest rate environment. “There is also some anecdotal evidence of increasing inventory levels in the sector even as prices continued to remain elevated,” the RBI said.
“The going has not been easy for real estate companies and they are looking to liquidate their assets and clear inventories and in case banks decide to take a hard stand, these firms could even have to reduce prices,” said Anurag Mathur, MD, Cushman & Wakefield.
Realty majors would have to look at alternate sources of funding like private equities in a bid to repay their outstandings. The dearth of funds has also led to a delay in completion of housing projects in several parts. The alleged involvement of Unitech and DB Realty in the 2G spectrum scam has also aggravated the problem, a senior bank executive who did not wish to be identified said.