RERA to deliver a debt blow to developers

Slump in realty market to add to woes, debt of top players likely to rise 15-20% this financial year

The Real Estate (Regulation & Development) Act, or RERA, would push up debt levels of real estate developers and lead to continued negative cashflows, say property developers and analysts.

Companies in the BSE Realty Index had a combined debt of Rs 52,598 crore as of September 2016, about 7.3 per cent higher than a year ago. These companies had an average 0.8 times debt to their total equity in September 2016.

The debt of top developers is expected to go up by 15-20 per cent in the current financial year, according to industry estimates.

"RERA will definitely