Raheja Universal Ltd got an Average Rating

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Raheja Universal Ltd’s is rated a three star on the scale of CRISIL. This implies that the proposed issue of Rs. 864 cr. is an average proposal as compared to other listed ones.

Mumbai will soon be gifted around 70 million sq ft of developed area by Raheja Universal out of which 26 million sq ft will be the commercial segment and 44 million sq ft will be residential segment.

The three stars received by the company from CRISIL reflect its strong position in the realty business in Mumbai. Due to its good execution track record and high quality construction, it has been able to maintain its image as a good brand. This brand name has been the major reason for the company being able to command premium prices over its competitors.

Also, other than this, the company owns an area of 1,202 acres across eight Indian cities.

Renaissance of Realty Sector

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In last few months Indian real estate has undergone a reawakening enforced by a noticeable increase in the level of construction activity of low-budget housing coupled with low home loan rates reached an all time low in the last few years.

As researched by Boston Analytics, the Indian realty sector has undergone an increased supply and pace of development activity which brought an improvement in pessimism associated with the realty prices. A low interest rate on home loans driven by Government’s impetus packages have also catalysed the Indian consumers to buy homes.

“Increased supply, improvement in pessimism related to realty sector rates, and low rates of interest on home loans seems to be encouraging Indian consumers to firm up their home purchase decisions” as said by Shirin Bagga, Economist, Boston Analytics.

The data was collected by conducting a monthly survey that targets 10,000 respondents cross 15 Indian cities—Delhi, Mumbai, Hyderabad, Kolkata, Chennai, Bangalore, Chandigarh, Nagpur , Ahmedabad , Kochi, Jaipur, Lucknow, Bhubaneswar, Patna, and Vishakhapatnam.

According to the recent reports the conviction concerned to speed of construction activity conveys more anticipation with regards to observed change in construction activity in Tier II and Tier III cities relative to Tier I cities. The real estate projects which are in different phases of completion in all levels of towns and cities appear to be introducing optimism about the expected change in construction activity among respondents across Tiers,” the report said.

As brought into light by Economic Survey of  FY 2009-10, the need of the construction and real estate sector in creation of both financial and physical assets has been amplifying over the years. The construction sector now accounts for 8 percent of GDP at constant prices, hiked from 7.7% in 2004-05.Equivalently, the share of real estate ownership of dwelling and business services in overall GDP as hiked to 9.2 percent in FY 2008-09 from 8.9 percent in 2004-05.