Listed developers’ cost of debt shrinks to 9% in FY23 from 10.3% in FY20

financialexpress.com:

The unfettered demand for housing across the country has enabled the country’s leading large and listed developers to reduce their debt, reveals an analysis of the financials declared by the top 8 developers engaged in the development of residential real estate.

As per ANAROCK Research, the net debt of top 8 listed developers – which include Sobha Ltd, Puravankara Ltd, Prestige Estates, Brigade Enterprises Ltd, Mahindra Lifespace Developers Ltd, Godrej Properties Ltd, DLF Limited, and Lodha Developers (Macrotech) — has reduced from INR 405 billion in FY20 to over INR 230 bn in FY23 – recording a decline of 43% in the period. On yearly basis, the net debt of developers has remained almost stable in FY 23 as compared to the year ago period.

Anuj Puri, Chairman, ANAROCK Group, says, “This decline in net debt is essentially because of boosted sales and revenues. These developers’ sales volumes have surpassed pre-pandemic levels and are headed for a new peak. With improved cash flows over the last few years, their debt has reduced significantly. Interestingly, the widening gap between the gross and the net debt also indicates a comfortable financial position for these players. For instance, the difference between the gross and net debt of the developers was approx. INR 74 bn in FY20 which has widened to almost INR 152 bn in FY23.”

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Meanwhile, the periodic interest rate hikes since April 2022 have led to a marginal rise in the cost of debt, though it remains lower than the pre-pandemic levels of FY20. This, however, will not impact large and listed players’ execution capabilities.

“The findings once again vouchsafe the increasing confidence of