In a report released on Monday, ANAROCK Capital said that $8.7 billion of the Mumbai Metropolitan Region's (MMR) realty loans now fall into the 'severely stressed' category. This is out of a total of $35 billion in loan advances given to developers in the region.
‘Severe’ stress implies high leveraging by developers with poor visibility of debt servicing.
This number (in MMR) reportedly is double that of the National Capital Region (NCR), which stands at $4.3 billion. The region incidentally has received a total of $23 billion in loans from banks, NBFCs and housing finance companies.
Bengaluru pips MMR and NCR in servicing realty loans -- having only $160 million (1%) under stress. Reportedly, this was due to stronger financial discipline on the part of developers in the city, as well as a lower demand-supply mismatch and range-bound properties that ensure gradual growth. Bangalore had received total loan advances of $16 billion.
The MMR and NCR collectively hold a 91% share of the total 'severely stressed' loans in Indian real estate that add up to approximately $14 billion. Both these markets, the report opines, have an ongoing liquidity crunch, with very poor prospects of recovery from the developers by the banks.
Pune, Hyderabad and Kolkata each received realty loan advances worth $3.7 billion, of which merely USD 370 mn is collectively under ‘severe’ stress.
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