Fitch Ratings expects residential property sales of most of the residential developers to come down by at least 20-30 per cent in 2017 because of the government's move to demonetise certain currency notes.


"Government's move in November 2016 to curtail undeclared wealth by demonetising certain currency notes is likely to take a toll on demand. Property and gold are popular instruments for investing undeclared income in India's large cash-based economy,' it said.


Fitch expects the credit profiles of most residential developers to weaken, as slower sales could mean cash collections will lag construction commitments.


"This would be particularly true for companies that have aggressively expanded their land banks in the past two years by using cash collections from previously sold properties. On the other hand, firms that have liquidity to complete their projects within the next three to six months may be temporarily insulated from the shock,' Fitch said. 


Fitch said it expected leverage (defined as net debt/adjusted inventory) of the seven large developers considered in the report to increase in 2017, from around 87 per cent at March-end (FY16) and 82 per cent at FY15.Fitch said it expected leverage of the 7 large developers considered in the report to increase in 2017, from around 87% at March-end (FY16) and 82% at FY15.

-- Business Standard