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Listed Developers’ Cost of Debt Shrinks to 9% in FY23 from 10.3% in FY20

Real Estate developers cost of debt in India
  • Avg. cost of debt of listed developers saw yearly increase (7.96% in FY22) but remained lower than the pre-pandemic levels due to rising repo rates
  • Net cost of debt of top 8 listed developers remains stable at approx. INR 230 Bn in FY23 in comparison to FY22, but is 43% down compared to FY19
  • Listed developer’s revenue collectively goes up by 7% on yearly basis – from approx. INR 281 Bn in FY22 to over INR 301 Bn in FY23; but it is yet to come back to pre-pandemic levels of FY20 (INR 329 Bn)
  • Meanwhile, listed players’ sales share has grown from 6% in FY17 to 15% in FY23
  • Sales by listed players grew from 57 Mn Sq. ft in FY 22 to 68 Mn Sq. ft in FY 23 – annual growth of 19%

Mumbai, 17 July 2023: 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 [1] engaged in the development of residential real estate.

As per ANAROCK Research, the net cost of debt of top 8 listed developers has reduced from INR 405 Bn 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.

Cost of Debt (%) of Top 8 Listed Developers
DevelopersFY 19-20FY 20-21FY 21-22FY 22-23
Brigade9.578.407.658.67
Godrej7.907.305.956.65
Mahindra8.707.106.508.20
Prestige9.829.809.1510.07
Puravankara13.7210.048.4911.31
Sobha9.699.048.408.93
Lodha13.0012.3010.509.80
DLF9.808.407.038.18
Total Avg.10.289.057.968.98
Source: Developers’ Investor Presentations & ANAROCK Research

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.”

Gross & Net Debt (INR Mn) of Top 8 Listed Players
YearFY 19-20FY 20-21FY 21-22FY 22-23
Gross Debt4,78,9994,16,2353,68,7013,81,898
Net Debt 4,05,1423,07,8412,29,7502,30,228
Gap b/w Gross & Net Debt73,8571,08,3941,38,9511,51,670
Source: Developers’ Investor Presentations & ANAROCK Research

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 most homebuyers in projects by these developers, who have entered the new fiscal with stronger and healthier books and values,” says Puri. “Also, while the top 8 listed developers are on solid financial ground, large unlisted players are also displaying a similar trend.” 

The market share of large unlisted companies such as ATS Green, GM Infinite, Myhome, Piramal, Runwal, Signature Global, Shapoorji Pallonji, Wadhwa Group, Provident Housing, Goel Ganga, and Casa Grande, among others. Cumulatively, the market share of large developers, both listed and unlisted, has nearly doubled – from 17% in FY17 to 36% in FY23.

Overall, as per ANAROCK Research, the last fiscal (April 2022 to March 2023) recorded sales of approx. 3.65 lakh units across the top 7 cities – the highest in the last 5 years. The first quarter of the current fiscal (April to June 2023) saw approx. 1.14 lakh units sold in these cities – the highest-ever quarterly sales recorded.

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