Real estate developers at risk as stress in credit market dries up funding

Cash crunch may shutter about 70% of developers: Goldman Sachs

The country’s developers are at risk of going belly-up as mounting stress in the nation’s credit market dries up funding even for those willing to pay decade-high rates.

“With the worsening shadow-banking crisis, borrowing rates for most developers have surged to the highest in more than a decade, in some cases about 20 per cent,” said Amit Goenka, managing director of Nisus Finance Services Co, which lends to developers. “Even at that cost, capital availability is limited.”

India’s year-old credit woes that began after a shock default by the IL&FS Group continue to linger, with many mortgage lenders struggling to roll over