Realtors Face Downgrade - CRISIL
Tuesday, October 21, 2008
Before fingers can be pointed out at rating agency after the company collapses, CRISIL is playing safe and is set to downgrade all the Indian Realtors who are debt trapped and facing severe liquidity crunch.
Developers today have few options in terms of financing. Either they have to slow down construction or reduce property prices to catalyze demand. Crisil has assigned non-investment grade ratings to some of the developers, indicating weak financial profile of these companies.
In a related development, lenders - Banks and financial Institutions are constinuously mounting pressure on Developers to price the properties lower and SELL-off before its too late. Baanks are fearing defaults on interest payments in this quarter and hence are meeting the managements of various Realty companies on weekly basis. Banks have also asked the Realty companies to get their Land Bank re-valued due to the correction in prices as most of them are holding them as co-laterals.
Developers such as Parsvnath, Unitech, HDIL, Omaxe, Orbit Corporation, Sobha Developers etc have borrowed aggressively to support their unrealistic realty plans which are likely to come crashing very soon.
Developers today have few options in terms of financing. Either they have to slow down construction or reduce property prices to catalyze demand. Crisil has assigned non-investment grade ratings to some of the developers, indicating weak financial profile of these companies.
In a related development, lenders - Banks and financial Institutions are constinuously mounting pressure on Developers to price the properties lower and SELL-off before its too late. Baanks are fearing defaults on interest payments in this quarter and hence are meeting the managements of various Realty companies on weekly basis. Banks have also asked the Realty companies to get their Land Bank re-valued due to the correction in prices as most of them are holding them as co-laterals.
Developers such as Parsvnath, Unitech, HDIL, Omaxe, Orbit Corporation, Sobha Developers etc have borrowed aggressively to support their unrealistic realty plans which are likely to come crashing very soon.
posted by Webmaster @ 12:10 PM
1 comments
1 Comments:
Well, i feel that indian real estate markets havent yet seen the recession and the prices may come down even further if the builders are not able to execute the proijects on time. The RBI has cut rates but whether credit is actually being made available to corporates especially real estate developers is yet to be seen. For details see www.indianpropertyreview.com
If someone is planning to buy a house then my advice would be to wait for another 3-6 months.
Ishani
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