Distress in Delhi's Real Estate Market
A real estate company based in Delhi, known for translating its customers' dreams into tangible assets, now faces challenging times, as it is engulfed by a top Mumbai-based Non-Banking Financial Company (NBFC).
Pledged Shares and Funding Woes
The promoters of the Delhi real estate entity had mortgaged their company shares to the NBFC, obtaining a loan of Rs 300 crore to address immediate working capital needs. However, the persistent downturn in the real estate arena and the devaluation of property assets have made it impossible for the promoters to respond to margin calls when share prices tumble.
Information from the market suggests the company is even failing to service the interest on its debts. In an effort to avert the loan from becoming a non-performing asset, the NBFC has begun offloading the real estate developer's pledged shares, which has accelerated the decline in stock value.
Market Impact and Forecasts
The real estate firm's stock value has plummeted by 80% from its recent peak. Market experts anticipate the sell-off pressure to continue, predicting that the stock could sink to new lows in the near future.