Listed Developers Reduce Debt, Plan Big Launch in Tier 2/3 Cities

A report by ICICI Securities points to the fact that net debt levels of listed real estate developers have declined 37% since the first wave of the COVID.

Plan Big Launch in Tier 2/3 Cities

“The decline in debt levels has been achieved through a combination of reduction in the cost of debt by 80-160 basis points (bps), reduction in corporate overheads by 20-40 percent from pre-Covid levels, operating cash surpluses, asset sales, and equity capital raise either through the QIP route or through dilution at the SPV level,” the report said.

The preference of homebuyers for listed developers is seeing an upward trend in the last few years. The advent of the pandemic has accelerated this trend. Strong fundamentals, financial heft, and a reputation of delivery are the key factors that have helped homebuyers tilt towards listed developers.

The preference of Homebuyers

Owing to the reverse migration, listed developers have found a huge untapped market in tier 2/3 cities as their next stage of growth. These cities have become extremely important also owing to the Government’s infrastructure push.

Owing to The Reverse Migration

According to a report by Anarock, data from the financial presentations of the top 7 listed realty companies reveals that listed players are gearing up to launch close to 92.5 mn sq ft of new residential space within the next 1-2 years.

Owing to The Reverse Migration