Wealth report slays theories of sluggishness in India's real estate sector

Source :SIFY
Author :SIFY
Last Updated: Tue, Dec 10th, 2019, 20:27:23hrs
Wealth report slays theories of sluggishness in India's real estate sector
The pain in India's real estate sector in recent times has been reported as one perennially needing a life-support. Media and agency reports have usually suggested a slump in consumer trends while policy-makers have been quoted talking of relief measures. In fact, policy overhauls such as implementation of GST (Goods & Services Tax) or the RERA (Real estate Regulation Act) were initially looked upon as challenges for the sustenance of the sector.

A month ago, Finance Minister, Nirmala Sitharaman expressed the government's desire to work with real estate sector in resolving the "prevailing sluggishness." In September the government announced creation of a Rs 20,000 crore special fund to provide financing to stalled affordable and middle-income housing projects. A recent cut in corporate tax rates to 22 percent involving an outgo of Rs 1.45 lakh crores also arrived as a relief package. The FM further hinted of more sops for real estate at a press conference.

The findings of a recent wealth report saw personal wealth of real estate barons growing. Hurun Report and GROHE India on Monday released the third edition of GROHE Hurun India Real Estate Rich List 2019 featuring the richest real estate entrepreneurs in India.

The listing features the who's who from India's real estate industry. Lodha Developers' Mangal Prabhat Lodha (President for BJP Mumbai) and family has been named India's richest real estate entrepreneur with a wealth of Rs 31,960 crore followed by DLF's Rajiv Singh and Embassy group founder Jitendra Virwani in the second and third position respectively.

According to the report, "Mangal Prabhat Lodha & family of Macrotech Developers (earlier named Lodha Developers) retained the top spot in GROHE Hurun India Real Estate Rich List 2019 for the second consecutive year."

Wealth for the Lodha Group, grew by an astounding 18 percent in 2019 and was 12 per cent of the cumulative wealth of the remaining 99 Indians featured on the list. Meanwhile, Rajiv Singh's (DLF Group) wealth soared by 42 percent from last year to Rs 25,080 crores.

The report also suggests that six of the top 10 and 37 of the 100 barons resided in Mumbai. Delhi and Bengaluru accounted for 19 residents each featured on the List. Not very surprisingly, three-quarters of richest Indians from the real estate sector lived in these three cities.

The list, based on a snapshot of wealth as on September 30, 2019 also lists the following businessmen:

1. MP Lodha & Family, Rs 31,960 crores
2. Rajiv Singh, Rs 25,080 crores
3. Jitendra Virwani, Rs 24,750 crores
4. Niranjan Hiranandani, Rs 17,030 crores
5. Chandru Raheja & family (K Raheja Corp): Rs 15,480 crores
6. Vikas Oberoi of Oberoi Realty: Rs 13,910 crores
7. Raja Bagmane, Bagmane Developers: Rs 9,960 crores
8. Surendra Hiranandani, House of Hiranandani Singapore: Rs 9,720 crores
9. Subhash Runwal, Mumbai-based Runwal Developers: Rs 7,100 crores
10. Ajay Piramal & family, Piramal Realty: Rs 6,560 crores

The wealth for most businessmen has grown from 2018. The listing for 2018 features the following names. Detailed information is available on Hurun India's site.

1. MP Lodha: Rs 27,150 crores
2. Jitendra Virwani: Rs 23,160 crores
3. Rajiv Singh: Rs 17,690 crores
4. Chandru Raheja: Rs 14,420 crores
5. Vikas Oberoi: Rs 10,980 crores
6. Niranjan Hiranandani: 7,880 crores
7. Surendra Hiranandani: Rs 7,880 crores
8. Ajay Piramal & Family: Rs 6,380 crores

And, here's the listicle for 2017. The detailed information is available here.

1. Kushal Pal Singh, DLF: Rs 23,460 crores
2. MP Lodha & Family: Rs 18,610 crores
3. Jitendra Virwani: Rs 16,700 crores
4. Yusuffali MA: Rs 12,180 crores
5. Vikas Oberoi: Rs 11,040 crores
6. Chandru Raheja: 10,440 crores
7. Sameer Gehlaut & family: Rs 5050 crores
8. Ajay Piramal: Rs 3640 crores
9. Surendra Hiranandani: Rs 3350 crores
10. Niranjan Hiranandani: 3350 crores
11. Smitha Crishna, Godrej Properties (Richest female entrepreneur): Rs 2210 crores

* AJAY PIRAMAL AND MA YUSUFFALI MA WERE REPORTED IN 2017 AS DONATING RS 111 CRORE AND RS 19 CRORE RESPECTIVELY

At a time when most sectors are complaining of a slowing economy, a report on the personal wealth of real estate barons alone may not imply of a rejuvenation. A recent finding by Anarock Capital suggests the total real estate sector loan at $93 billion. Of this, the agency estimated only 62 percent as being "stress-free" while $14 billion worth of assets were placed in the severe-stress category.

However, for all the bad press, the sector certainly has witnessed some improvement. Lowering GST rates in recent times, up-tick in Pradhan Mantri Aawas Yojana and affordable units were factors that helped revive housing sales.

A first-impression of Hurun-Grohe's study makes one assume that an economic revival may have helped create wealth. One can only hope that this trend sustains in 2020 and also percolates into sweet deals for consumers and the overall economy. After all, this is a sector that is expected to contribute nearly 13 percent to the GDP by 2025 (as of 2017, the sector was reportedly contributing 6-7 percent).