The easing of fund raising norms through the external
commercial borrowing (ECB) route will lead to developers / promoters focusing
on low-cost housing projects, says rating firm CRISIL.
Earlier this week, Reserve Bank of India (RBI) lowered
the total experience of developers or /
builders for affordable housing projects to three (3) years, against
Five (5 years) prescribed earlier to avail of ECBs.
Besides, the apex bank RBI has also withdrawn the
condition of minimum paid-up capital requirement of not less than Rs. 50 crore
for housing finance companies (HFCs) to avail of ECBs.
"Both, HFCs & developers, are the direct
beneficiaries while house buyers will also benefit in terms of concessional
interest rates & greater availability of low-cost houses" CRISIL said
in a report.
CRISIL estimates that the cost of funding for developers
will come down to about 9 to 11% (taking into account the hedging cost) from
the current levels of 15% to 20%, depending on the current source of funds.
"In addition to the cost of funds, since the
criteria of past experience has been relaxed, relatively less experienced
developers will also benefit as it will enable them to launch new projects in
the affordable housing segment" CRISIL said.
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