Top 5 Real Estate Companies inventory at over 42k crores

outstanding Inventory of Real Estate Companies in IndiaIndia's top property developers are sitting on more than 2 years of unsold inventory worth more than Rs 58,000 crore as of March  2013. One third of this amount is accounted for by DLF alone. DLF is sitting on an inventory pile up worth Rs. 17,600 crores at the end of financial year 2013. 

Beside DLF, HDIL, Indiabull real estate, Unitech and Omaxe have also reported substantial amount of unsold inventory (figures given below) at the end of March 2013. With the passage of real estate regulation bill and discontinuation of 80:20 subvention scheme the situation is going to get worse before it gets any better. 

Numbers for Top Five Builders in FY13 (Rs cr)
Company       InventoriesNet Sales 
DLF      17,645.57,772.8
HDIL        12,043.01,025.2
Indbulls Real Est.5,110.81,391.6

Also Read: Mumbai Realty Inventory at Peak price fall imminent - says Orbit

As of September 2013 developers are already feeling the pinch of slowdown in sales due to firm property prices and rising interest rates. Many big sized developers even defaulted on Bank payments due to cash crunch. The working capital requirement for real estate developers have gone up across the board which will impact the profitability of these companies negatively as a result of which the stock price of almost all real estate companies are subdued with DLF and Unitech stocks at 52 week lows. 

Banks already have large exposure to the beleaguered real estate sector in India and are reluctant to lend further until the developers clear the unsold inventory. With debt and equity avenues almost dry, a sharp cut in price to clear backlogs seems inevitable.

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