Innovative funding may work in Indian realty
Pranay Vakil: Kruti can you give some examples of innovative funding for the benefit of the panel? It is just to prove a point about how innovative that funding has been.
Pranay Vakil: Kruti can you give some examples of innovative funding for the benefit of the panel? It is just to prove a point about how innovative that funding has been.
Kruti Jain: I believe any funding available in real estate is gap funding. It is not about only the gap which is there in funding for real estate because what happens for other industries is that they have this reserve capital which is not their land or raw material, but is the actual capital they put in to manufacture xyz product and then they replenish the funds with whatever returns are accrued.
It is a highly disappointing budget. The Finance Minister has miserably failed in highlighting the importance the role of Housing in economy, employment generation, apart from the very need of housing. The announcements on ECB for affordable housing is a minor respite but still meaningless.
While many of the Indian cities are reeling under the apprehension of slowdown with sales nosediving, Pune real estate has defied any such apprehensions.
After a sharp recovery in the first one-and-a-half months of the calendar year — the Bombay Stock Exchange (BSE) Realty Index gained over 50 per cent, real estate stocks seem to have lost steam.
The PE players have expressed concern about difficulty in exits, governance issues in investee companies and certain taxes such as the Dividend Distribution Tax which are excessive and do not conform with global standards.
India is the ninth largest construction market in the world according to a Global Construction 2020 report by Oxford Economics. Growing at an estimated cumulative annual growth rate of 8.9%, it is expected to become the third largest market by 2020 and is globally acknowledged as an extremely lucrative business opportunity.
Analysts are worried and do not see a rosy picture ahead in 2012. According to them real estate companies planning IPOs in 2012 may experience a lack of enthusiasm on the part of investors.
The ever-increasing housing needs in urban centers have caused home prices to shoot up to extremely unaffordable levels.
Regulation is required for any industry to function properly and the real estate industry is no exception. The market is being manipulated by the big and influential real estate lobby causing large inequities in resource and product allocation.