Construction finance is a ₹1.25 trillion-ayear market in the country, with developers getting finance at 8 to 11% rates, depending on their credit profile.
According to industry experts, top developers are not utilising nearly 80% of credit lines sanctioned by banks, housing finance companies and non-banking finance companies (NBFCs).
Housing sales across the top cities hit a record high in the third quarter of the calendar year despite the usually slow monsoon quarter, and are expected to touch a decadal high this year."
Amit Bagri, chief executive at Kotak Mahindra Investments, said their construction finance lines are seeing utilisation of only up to 25 to 30% of the sanction limits.
"The need for construction finance is down... Developers are not using credit lines as sales and collections are very good," Bagri said.
"Repayments continue to come in thick and fast due to strong collections; hence the need for more new sanctions to grow the book."
Bagri said the non-banking company is seeing this trend across Pune, Bangalore Hyderabad, Mumbai, and NCR.
This story is from the October 23, 2023 edition of Financial Express Mumbai.
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This story is from the October 23, 2023 edition of Financial Express Mumbai.
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