New Delhi, July 29
India’s real estate sector has significantly improved its financial discipline, resulting in more credit from banks, credit rating upgrades and investor enthusiasm, according to a report on Tuesday.
The credit rating of real estate companies rose due to better operating margins, profitability margins and leverage ratios, the report from real estate management firm Colliers India said.
After the Covid-19 pandemic, the real estate sector showed a ‘V-shaped’ recovery, with its credit and financial metrics outperforming other major industries, it added.
From FY21 to FY25, bank credit to this sector has doubled from Rs 17.8 lakh crore to Rs 35.4 lakh crore, outperforming the average bank credit to other industries by 30 per cent. Nearly one-fifth of bank credit deployment was in real estate, indicating lender confidence.
Further, the quality of loans has also improved significantly. The proportion of Gross Non-Performing Assets (GNPA) in the banks' loans to the construction industry significantly reduced from 23.5 per cent in March 2021 to 3.1 per cent in March 2025.