Realty stocks slip on stringent penalties in Reality Bill
Stocks in real estate companies suffered notable declines in early trade on Wednesday after the Union Cabinet approved the Realty Bill that proposes stringent penalties on scheming developers to protect buyers.
The Union Cabinet late Tuesday approved the Real Estate (Regulation and Development) Bill, paving way for the establishment of a regulator for the real estate sector.
The Bill proposes to provide a uniform regulatory atmosphere to the reality sector, which has thus far remained unregulated.
The new Bill also says that any real estate developer could be slapped with a jail term for putting out any misleading adverts about projects. In addition, it intends to make it obligatory for real estate developers to launch new projects only after obtaining all statutory approvals from relevant authorities.
The approval of the Bill discouraged investors in real estate companies. Anant Raj shares slipped 2 per cent, while shares of HDIL, Parsvnath Developers and Prestige Estates fell 1.3 per cent, 1 per cent and 2.5 per cent, respectively.
Unitech shares also suffered a marginal decline of 0.4 per cent. DLF was trading flat in the morning trade on Wednesday.