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MUMBAI: Private sector lender ICICI Bank sees potential in the real estate industry at the moment, but limited to those who have got their house in order, said Anup Bagchi, executive director, ICICI Bank.

“At this point of time, we see there are tailwinds in the real estate sector but it is not generic. It is only for large consolidated players and those that are improving," he said.

Bagchi said that while the bank has not diluted its risk standards, more real estate borrowers are able to meet these standards. “Their leverage has come down, inventory has come down, demand has moved up," he said.

The builder portfolio including construction finance, lease rental discounting, term loans and working capital was at 31,963 crore as on 30 September, compared to 27,569 crore as on 30 June. According to the bank’s earnings call on 22 October, the builder portfolio is over 3% of the total loan portfolio.

“Our portfolio is largely to well-established builders and this is also reflected in the sequential increase in the portfolio. 6.8% of our builder portfolio at 30 September was either rated BB and below internally or was classified as non-performing, compared to 8.3% as on 30 June," it had said in October.

Meanwhile, the bank on Thursday launched a stack for companies in the real estate sector to offer solutions to their banking requirements on one platform. The stack, a combination of digital and phygital solutions, enables participants of the real estate sector namely builders, Real Estate Investment Trusts (REITs) and Alternate Investment Funds (AIFs) to undertake banking transactions expeditiously, it said in a statement.

ABOUT THE AUTHOR

Shayan Ghosh

Shayan Ghosh is a national writer at Mint reporting on traditional banks and shadow banks. He has over a decade of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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