Builders scale down, exit projects amid cash crunch

Squeezed by impatient lenders on one side and angry customers on the other, many property developers are shrinking their businesses or planning to exit altogether. Some of them have avoided new launches for years, focusing instead on completing ongoing projects, selling land and finding partners for development. The reasons: a crippling cash crunch and heavy debt in a market that has flatlined in the past four-to-five years, besides a tough real estate law. Kumar Urban Development Ltd (KUL), one of the biggest land owners in Pune, has not launched a project in three years, a person in the know said, asking not to be identified. According to two others, it recently sold 300 acres at Hinjewadi and Manjari Khurd to VTP Group—another local builder—and institutional investors. The land sale is part of KUL’s strategy to repay debt. Lalit Jain, chairman and managing director, KUL, declined to comment on the land sale, but said, “We have been trying to sell a few of our assets. We are debt-free now. We will come up with our next growth plan,” Jain said, without elaborating. The fate of some of India’s largest developers such as Unitech Ltd, Amrapali Group and Jaypee Infratech remain uncertain owing to insolvency proceedings, with many promoters in police or judicial custody and stalled projects.