Stock prices of India’s top developers soar

Investor confidence that interest rates will remain low and demand for housing high is driving up share prices of India’s largest developers.

The S&P BSE Realty Index, which tracks the country’s top 10 development firms, posted its highest close earlier this week since December 2010, according to Bloomberg News.

Share prices for some companies in the index have increased between 19 and 80 percent this year alone. Mahindra Lifespace Developers stock has tripled since this time last year.

The surge reflects expectations more than results. The country’s real estate market has been in a six-year rut, thanks in part to a wider economic slowdown and a credit crisis. The nation’s largest developer, Macrotech Developers, narrowly avoided defaulting on several hundreds of millions of dollars in debt last year.

By late 2019, some $63 billion worth of abandoned projects were strewn across the country, prompting the Indian government to establish a fund to finish them.

Murtuza Arsiwalla, director research at Kotak Institutional Equities, said that supply has tightened and developers are drawing in buyers with flexible payment plans.

Residential sales were up 18 percent through the first half of this year and project launches up 10 percent from a year ago, according to JLL. [Bloomberg] — Dennis Lynch https://www.bloomberg.com/news/articles/2021-07-12/demand-for-new-homes-sends-india-s-realty-index-to-a-decade-high