Archive · 8 Sep 2026
Real-Estate Developers Resume Borrowing as Cash Surpluses Shrink
Real-estate companies collect money when people buy homes.
They use much of that money to build projects, buy land, and develop offices, malls, or hotels.
In FY26, companies kept less cash from each rupee they collected than they did the year before.
Many also spent more money than they received.
Fewer companies ended the year with extra cash.
Selling shares became a less important way to raise money.
Borrowing became more important instead.
DLF was different because it paid off its main development debt and still had extra cash.
Nuvama expects borrowing to rise gradually as developers continue spending on new projects.
Developers retained Rs 39 of every Rs 100 collected as cash profit in FY26, down from Rs 42 in FY25.
Spending on land and rental assets remained high at 38% of collections in FY26, compared with 40% in FY25.
Only three of 21 tracked companies ended FY26 with surplus cash, down from four in FY25 and eight in FY24.
Debt funding rose to 25% of total cash inflows in FY26 from 3% in FY25, while equity fundraising fell to 17% from 47%.
DLF paid off core development debt and held surplus cash, while Brigade and Prestige Estates recorded the sector’s largest cash shortfalls.
- Who
- Indian real-estate developers tracked by Nuvama Institutional Equities, including DLF, Prestige Estates, Brigade, and others.
- What
- Developers are increasingly using debt as cash surpluses shrink, equity fundraising declines, and spending on land and rental assets remains high.
- When
- The changes mainly concern FY26, with the report also citing debt-to-equity levels by June 2026 and expectations for coming quarters.
- Where
- India’s real-estate sector.
- Why
- Lower cash retention from property sales, continued investment in land and rental assets, and reduced share fundraising created larger cash gaps.
- Cash profit retention
- Developers retained about Rs 39 per Rs 100 collected in FY26, down from Rs 42 in FY25.
- Rental and land spending
- Spending accounted for 38% of collections in FY26, compared with 40% in FY25.
- Companies with surplus cash
- Three of 21 tracked companies ended FY26 with surplus cash.
- Debt funding
- Debt provided 25% of total cash inflows in FY26, up from 3% in FY25.
- Equity funding
- Share sales provided 17% of total cash inflows in FY26, down from about 47% in FY25.
- DLF position
- DLF paid off all debt in its core property development business and ended FY26 with surplus cash.
- Sector outlook
- Nuvama expects developers to borrow gradually more as land and rental-project spending continues.