Apartment buildings in Palava City, Mumbai.Indian home buyers are flocking to the nation’s well-funded publicly traded developers. Image Credit: Bloomberg

Mumbai: Indian home buyers are flocking to the nation’s well-funded publicly traded developers as risks of stalled and delayed housing projects mount at smaller players in the industry.

While overall home sales remain weak, India’s top nine listed real estate companies saw sales jump 159 per cent in the year ended March from 2017, when the slowdown began, Anarock Property Consultants said in a report this month. These developers also reduced their debt by a total 8 per cent during the period while competitors struggled to survive.

The revival is seen in the stock market, where the S&P BSE Realty Index has surged 21 per cent this year — three times as much as the broad BSE 500 Index — and is set for its biggest annual gain since 2017. The property gauge is also the best performer among 19 sectoral sub-indexes compiled by BSE Ltd.

Compare this performance with India’s broader real estate industry, where as many as 500 firms face bankruptcy and Citigroup Inc estimates as much as Rs800 billion ($11 billion) of debt is locked within incomplete projects. A credit crunch is feeding into — and worsened by — an economic slowdown that’s hitting Indians’ demand for goods and services.

Home buyers are going to listed companies to mitigate the risk of their apartment building being left unfinished, Anarock Chairman Anuj Puri said.

While the government plans to set up a Rs250 billion fund to salvage stalled residential projects, it is estimated to only be sufficient to salvage some 6 per cent of constructions that are running behind schedule.