tag:blogger.com,1999:blog-19649274.post42642658361473863..comments2024-03-27T17:16:12.789+05:30Comments on The Leap Blog: Cash crunch at real estate companiesAjay Shahhttp://www.blogger.com/profile/03835842741008200034noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-19649274.post-32651831077672615702008-10-07T23:42:00.000+05:302008-10-07T23:42:00.000+05:30Our company does project funding for real estate d...Our company does project funding for real estate developers. The reason it makes sense to pay 36% (or more) is because the developers have used short term funds (customer advances, progress payments etc) to buy long term illiquid assets (land banks). No further money is forthcoming from customers or banks as they have not made enough progress on current projects. The only way out is to execute current projects fast, faster and then even faster with the funds they raise at the exhorbitant rates so that they can get the customer and bank funds flowing again (velocity/multiplier effect).Radhahttps://www.blogger.com/profile/06681078551596006335noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-12519484332074134062008-10-07T14:36:00.000+05:302008-10-07T14:36:00.000+05:30Whats the distress sale value of a share like unit...Whats the distress sale value of a share like unitech in these market - not more than 20-40% of the current price. Thats the value creditors will attribute if the shares are used to take debt.<BR/>The main problem is that real estate is a black-listed sector , so whatever may be the merits of the case , no one will lend them. "No one got fired to buy IBM " . Further the distress sale value of the assets in the book may be artificially inflated , and in india pledge of demat and listed security is a only good security worth mentioning. If u take any other security , the debtor may drag u into the courts for ages. So who gives a damn to the security of physical assets.Unknownhttps://www.blogger.com/profile/11384814227805173389noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-79270801762868475252008-10-07T14:16:00.000+05:302008-10-07T14:16:00.000+05:30With Bleeding money markets , downturn in capital ...With Bleeding money markets , downturn in capital markets days are not far when RBI may have to bail out few retail companies which have already taken money from potential home buyer in advance but not starting the construction activities due to tight liquidity and huge current liabilities .Ankithttps://www.blogger.com/profile/04038724136774378284noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-22625027904551833042008-10-07T10:41:00.000+05:302008-10-07T10:41:00.000+05:30I have no insights on funding crunch of real estat...I have no insights on funding crunch of real estate market but I was wonder about the seniority of privately placed stock sale and buy back agreement - which apparently is equivalent to debt. Does it have seniority over public stock?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-9858262760505217302008-10-06T22:13:00.000+05:302008-10-06T22:13:00.000+05:30For how long can a company service high r@i for it...For how long can a company service high r@i for its stock, especially under these tight conditions in a market with no takers. Doubtful, then in what circumstance pay such a high r@i?<BR/>Thinking avoiding an EOD on equity financing is driving the acceptance to pay such rates.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-44889317547331171042008-10-06T19:53:00.000+05:302008-10-06T19:53:00.000+05:30IMO the real estate companies basically made a car...IMO the real estate companies basically made a cartel & most new supply of apartments,commercial space, malls etc was tightly regulated. In order to maintain this stock it was necessary for them to have huge working capital requirements. The selling price was also tightly controlled & this notional price was the benchmark of the so called NAV of the land bank they held. Basically a big scam & most intelligent people fell for it. - Ashok ThakwaniAshok Thakwanihttps://www.blogger.com/profile/00338395134840523265noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-52099060497937142122008-10-06T17:59:00.000+05:302008-10-06T17:59:00.000+05:30ndians wake up from mungerilal trance.Hard daya ar...ndians wake up from mungerilal trance.<BR/>Hard daya are here<BR/>Expect major hari kari in the indian market.<BR/>Expect indian real estate to crash to pre BUBBLE 2001 prices<BR/>Expect major layoffs in IT/BPO.<BR/>Expect end of so called reforms.<BR/>Rupee Target 2009- Rs 60 - $1<BR/>Sensex Target 2009- 3550<BR/>welcome to real world, mungerilalsAnonymousnoreply@blogger.com