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The net debt levels of listed real estate developers have declined 37 per cent since the first wave of Covid-19.

An ICICI Securities report noted that the decline in debt levels has been achieved through a combination of reduction in cost of debt by 80-160 basis points (bps), reduction in corporate overheads by 20-40 per cent from pre-Covid levels, operating cash surpluses, asset sales and equity capital raise either through the QIP route or through dilution at the SPV level.

"On an aggregate basis, listed developers in our coverage universe (ex-REITs) have been able to bring down their consolidated net debt levels by 37 per cent to Rs 274 billion (ex-DCCDL) between Q4FY20-Q1FY22 (March 20 to June 21)," it said.

While the overall real estate sector in India, especially the unlisted space, continues to grapple with high cost and quantum of debt, listed developers' balance sheets have become leaner which puts them in a strong position to invest for growth in the medium term and is likely to accelerate the pace of consolidation in the sector.

The report noted that developers have used a mix of organic and inorganic routes to reduce debt.

The report noted that listed developers will invest in growth once Covid impact fades away. As per the stated intent of majority of developers in our coverage universe, while they have protected their balance sheets through the tough Covid impacted period, they will again begin to invest in new land parcels in a judicious manner to grow their business over the next three to four years, it said.