Most realty stocks suffered strong losses in intraday trade on May 18, keeping their sectoral indices in the negative territory.
Shares of Prestige Estates, DLF and Indiabulls Real Estate cracked up to 8 percent on BSE.
Around 11:40 hours, the BSE Realty index was 4.56 percent down at 1,284.84 with all stocks in the red.
On May 13, Finance Minister Nirmala Sitharaman said that the deadline for the completion of real estate projects would be extended by up to six months in the face of the COVID-19 and that it should be treated as a ‘Force Majeure’ event under the Real Estate Regulatory Act (RERA) 2016. This announcement was followed up by the Centre issuing an advisory to all states and union territories to treat the pandemic as an ‘act of God’ and suo motu extend the completion dates of projects.
States, union territories can suo moto extend registration and completion date of realty projects by six months if projects are registered on or after March 25.
“MoHUA India will advise states/UTs and their regulatory authorities to extend the registration and completion data suo moto by six months for all registered projects expiring on or after March 25, 2020, without individual applications,” she said.
Due to COVID-19, projects stand the risk of defaulting on RERA timelines. Timelines need to be extended, she said.
Meanwhile, Indian equity benchmarks suffered strong losses in intraday trade on May 18, with Sensex falling over 3 percent each.
“Markets were hopping on big bang government stimulus measures to boost demand and the eventual peaking of virus infections. Both of these have not happened. Stimulus measures have not enthused the markets, while lockdown had been extended again due to rising infections. This in addition to the insolvency procedures announced by the FM yesterday could lead to an increase in NPAs for banks which is the worst affected today,” said Sony Mathews, Senior Market Strategist at Geojit Financial Services.
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