China’s Evergrande Crisis An Opportunity For India’s Real Estate?

For Indian finance companies and to a certain extent real estate companies China's Evergrande can be an opportunity


The Dows and the NASDAQ witnessed sharp lows on Monday and is considered as worst performance in the last few months and the reason for the same is China’s real estate conglomerate company Evergrande. As per reports the firm is facing a debt of $300 billion which it has to repay to several international banks.

This has made investors across the globe anxious. Economic experts fear that it might be the repetition of the 2008 Lehman Brother’s Crisis. Stocks related to the bank and energy performed worst. JP Morgan, Goldman Sach’s fared badly. Shares of Evergrande plummeted more than 87% in China market.

However, US markets went down and also recovered from their lows so this can be compared with the Lehman brothers but some say it’s not as serious as that. There is no possibility of a global recession due to this Evergrande crisis. The Dow and Nasdaq have their own problems and hence have seen the ups and downs. It is being said that for Indian finance companies and to a certain extend real estate companies this can be an opportunity as the global businesses can shift to India.

Internationally it is being said that Evergrande’s debt crisis is a looming threat to the global markets. The two prime reasons that ignited the Evergrande crisis are first, chinese regulators vetted into high borrowings of property developers and second, the decline of business In China’s property market resulted in a reduction in the demand for new houses and eventually led to a cash crunch.

The current scenario of the Evergrande crisis-
1. Burden of liabilities of $300bn
2. Fall in share price
3. Unfinished 800 residential buildings
4. Unpaid suppliers
5. Million clients who have partially paid money for property