Despite the surmounting challenges over the last three years, the company has been able to slowly recover. It managed to meet its short-term debt commitments and get refinancing for a construction loan. The government and central bank’s moves to ease liquidity in the post-pandemic economy also helped the company.

Taking these factors into account, Moody’s changed its rating for the real estate firm from negative to stable in November last year.

India’s real estate sector’s sales improving

Post unlocking, the fortunes of the real estate sector have slowly turned.

Low interest rates and drop in property prices along with pent-up demand are expected to drive sales. “This environment will continue to support housing demand in the country at least over the next 12 months,” said Moody’s report released in November 2020.

What will also help Macrotech Developers is the unabating IPO mania. In the last financial year (April 2020-March 2021), around 30 companies listed on Indian stock markets, raising a total of Rs39,000 crore.

But relatively favourable market and macro conditions don’t mean Macrotech Developers is completely out of the woods. It may face a rating downgrades again in the future if operating sales and collections fail to recover. Also, the emerging second wave of Covid-19, which is most severe in Mumbai, could push the sector into a turmoil again.

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