Big builders likely to tighten grip as realty mkt consolidates around them

India's real estate sector is poised for significant consolidation, as customers increasingly shift to Grade A developers known for delivering homes with minimal delay.

- GULVEEN AULAKH & PRACHI PISAL

According to ratings agency Icra, the share of major listed developers as a percentage of total sales value has been rising.

Well-capitalised builders, according to top executives of leading players and industry experts, are expected to command more than half the market's inventory in the coming years.

"Consolidation is happening because of past practices of others. It's not that the people didn't give them chances. You can't take people's money and then play with it. After the Real Estate (Regulation and Development) Act, 2016 (Rera), there's tremendous accountability and the government is reasonably strict. That is changing the system," Aakash Ohri, joint managing director and chief business officer at DLF Home Developers Ltd, told Business Standard.'

In the past, developers delayed residential projects, defaulted on loans, and left hundreds of homebuyers in financial distress many with life savings locked in unfinished properties, forcing them to seek relief from the government and courts. In response, the sector witnessed the introduction of tighter norms and the implementation of Rera.

"Regulatory reforms, including Rera, the Insolvency & Bankruptcy Code, and other measures by Sebi and the RBI, ensure that only disciplined and professionally managed developers thrive in this competitive market," said Sanjay Dutt, managing director and CEO of Tata Realty & Infrastructure.