Since April this year, Unitech has sold over 6,000 residential units amounting to 4.5 million sq ft even as many of its older projects remain incomplete and buyers clamour for speedy delivery

Recent moves by the country’s second-largest real-estate developer, Unitech, suggest that it would rather launch new projects and collect money from new buyers to cut down its debt than complete its ongoing projects. Since April the company has sold over 6,000 residential units amounting to 4.5 million sq ft (ticket size of up to Rs 50 lakh). The company has also been raising money by selling equity through qualified institutional placements to reduce its debt, which had ballooned to nearly Rs 11,000 crore by the end of 2008. Despite customers clamouring for delivery in about a dozen unfinished projects, the company has launched over 30 new projects in the last four months.

Market watchers think Unitech’s is a classic case of a real-estate company that had over-expanded during the boom years, and now finds itself saddled with high debts. Many of its recent moves smack of desperation, such as selling of promoters’ stakes to institutional buyers, turning luxury projects into affordable housing units (leaving customers, who had booked flats in these projects at a time when prices were at their peak, feeling cheated). In all this, the worst-hit are its older buyers: with many ongoing projects way past their delivery, they don’t know when their flats will be delivered, and worse still, where to turn to for recourse.

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