RERA, Note Ban Impact Fading For Real Estate Sector, Info Edge Says

A worker removes a door during the reconstruction of a building. (Photographer: Sara Hylton/Bloomberg)

Things are starting to look up for the real estate sector after disruptions stemming from the note ban and implementation of the Goods and Services Tax and the Real Estate Regulation and Development Act, according to Info Edge India Ltd. The company owns several e-commerce portals, including real estate website 99acre.com.

The second half of last year was “disastrous” due to demonetisation while there were uncertainties and ambiguities in the first half owing to the implementation of RERA and GST, Hitesh Oberoi, managing director and chief executive officer of Info Edge told BloombergQuint. But the short-term disruptions are now fading, he said.

We are very bullish on real estate now...The government is also helping as they are subsidising affordable housing and a lot of the launches we are expecting, going forward, will be in this space.

Hitesh Oberoi, Managing Director And Chief Executive Officer, Info Edge

The Real Estate Act, which was implemented in May this year, was aimed at reforming the sector traditionally plagued by project delays, diversion of funds by builders, one-sided builder-buyer agreements and lack of financing. The Act requires developers to comply with timelines and obligations promised to consumers, in an effort to boost confidence among potential homebuyers. But in the short term, it left developers battling with a severe liquidity crunch.

Oberoi believes the new regulatory framework is a change for the better. Before the Act was implemented, the sector “was in very bad shape. There was no business to be done. Many of clients were going out of business and the transactions where all time low,” he said. “A large number of builders and developers continue to be in trouble but there are green shoots here in this business,” he said.

Watch the full conversation here.

Naukri.com

The revenue of Info Edge's jobs portal Naukri.com is linked with the country's GDP. The economic slowdown in the aftermath of the note ban and GST hit job growth in sectors such as telecom, construction, real estate and infrastructure said Oberoi.

“We saw a slowdown in small and medium enterprise space in the last four quarters,” he said.

Jeevansathi.com

Oberoi is positive on the prospects of the company's matrimonial website.

From the last eight quarters, we are fastest growing matrimonial site. We are growing at 25 percent per anum and we have been growing in same rate from last two years. The sector is growing at 8-9 percent per anum. We are gaining market share.

Policybazaar

The online insurance marketplace, which is 10 percent owned by Info Edge, has been “on a tear” since the last two quarters and is growing very rapidly.

They are breaking even in many of the space they operate in. They are very dominant in that (insurance) segment and Paisa Bazar is doing well for them. The business securities finance and insurance sector is looking up and it's a good time for them.

Zomato

Zomato, also partly owned by Info Edge, has also seen a turnaround over the last one year. “There was a point when they were losing a lot of money but they are close to breaking even since the last three to four quarters,” he said.

There is competition from the likes of Swiggy, but they are also strong players in that space. They have to keep investing to maintain their dominance and leadership.