Unitech, one of the leading real estate developers, expressed its concerns over various regulatory steps taken by government of India in real estate sector. It also held the restricted funding responsible for it’s slow down.
"The lack of refinancing options disturbed the balance that the company was maintaining between increases in construction expenditure on one side and reduction of debt on the other," said Unitech's executive chairman Ramesh Chandra, in a letter to shareholders.
He said, "...the industry is increasingly coming under the ambit of several regulatory developments. Land Acquisition, Rehabilitation and Resettlement Bill, 2011 and Draft Real Estate Bill, 2011 are two such developments."
"While these are well intentioned," added Chandra, "they may run the risk of stifling the growth of the real estate sector if proper balance is not maintained between the interests of various stakeholders."
The company witnessed a sharp fall in its revenue from operations in 2011-12 at Rs 2,422 crore against Rs 3,396 crore, down 29%. While its net profit got more than halved to Rs 246 crore compared with Rs 583 crore in the previous year. During the quarter ended June, 2012, the company's net profit dipped to Rs 31.76 crore against Rs 108.07 crore while revenue slipped to Rs 178.85 crore compared with Rs 277.32 crore in the previous corresponding quarter. Its net debt to equity ratio at 0.45 is one of the lowest in the sector.
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