By: Ravi Sinha
Track2Realty Exclusive
Realty firms are making a beeline to private equity investors for money to repay mounting debt portfolios. With commercial banks turning cautious about lending to the real estate sector, industry players strapped for cash are seeking equity capital to ease the liquidity crunch. However, Unitech, once seen as the most creditable realtor may see all the funds drying up in the absence of credit reliability and credibility.
With Unitech boss Sanjay Chandra charged with cheating and forgery by the CBI in the 2G spectrum scam, it is unlikely that any fund manager would like to do business with the Unitech. Banks are anyway maintaining a safe distance from Unitech following the involvement of the company in the spectrum scam. Requesting anonymity a real estate consultant told Track2Realty that the roads ahead for Unitech are only going downwards.
The pressure on repayment of debt is building on Unitech. There are very few options available with the developer and they have been increasingly borrowing from non-banking financial institutions (NBFC) and raising capital from private equity investors in the past.
“We have helped a lot of real estate companies who have approached us in times of difficulty. They have used our funds for both execution of projects and repaying debt. But the case of companies like Unitech and DB Realty is different now, given the serious nature of the chargesheet against them,” said a real estate private equity fund. He also requested not be quoted in the story.
So what is the future of the Unitech projects that have been launched in the last 2-3 years? Well, property analysts warn to keep a safe distance from any of the upcoming projects of Unitech as they hardly see a chance of these projects being completed. The industry though is divided over whether this is the end of road for once the largest realty company in India.
