Project Proposal

Topic of study: Analysis of the performance of real estate companies before

and after RERA, 2016

Introduction
Real estate can be defined generally as space delineated by man, relative to a fixed geography,
intended to contain an activity for a specific period of time. Real estate can be classified as: Residential
new houses and existing houses for resale, Commercial shopping centres and offices, Industrial and
manufacturing buildings and property and vacant land and farms.
Before the introduction of The Real Estate (Regulation and Development) Act, Indian real estate
customers had little legal recourse and consumer protection was offered to them under various acts
such as: The Indian Contract Act, 1872; The Consumer Protection Act, 1986. Indian consumers had to
approach various authorities such as, Consumer Courts and Civil courts, to get their grievances
addressed. Before the passage of the act, no single regulatory authority existed for regulation of real
estate sector and buyers were facing problems like timely delivery of projects, possession not being
handed over by the developer, high rate of interest being charged on late payments, multiple bookings
for the same property etc. The developers were facing issues like delay in construction permits, late
payments by homeowners and operations in a non-transparent environment The Real Estate
Regulatory Authority (RERA) was formed to bring transparency, accountability and efficiency into this
sector with the rights and duties of both buyers and developers being clearly defined.

Objective
The research aims to analyse the impact of Real Estate (Regulation and Development) Act, 2016 on
the real estate companies. It aims to understand and compare the pre & post RERA conditions in the
real estate industry mainly from three perspectives – the profitability of real estate firms, the financial
market performances and the broader sentiment about the industry.

Scope of study
Since the focus of the study is to study the real estate industry in India, I will be limiting to investigating
the performances of real estate companies within the geographical boundaries of India. During the
course of the study I will also be using secondary data sources such as Prowess, CMIE, etc.

Methodology
The methodology adopted consists of mainly three parts. The first part involves the financial analysis
from various data sources. From the commercial real estate point, I would be analysing the financial
statements of the listed real estate companies 3 years before and 3 years after RERA. From the
residential real estate point of view, I would be analysing the matrix used by the RBI – Housing Price
Index (HPI) to study its movements pre and post the reform. The second part includes the analysis of
stock market performances of the real estate firms with comparison between pre and post reform
performances. The third part would involve studying the broader sentiment in the market before and
after RERA. It would involve studying the pattern of investments and how they have changed over the
years with the implementation of the act.

Deliverables
A research paper of a publishable quality.

Limitations
Data availability on certain firm-specific variables may be a limitation which could be faced if the firms
are not mandated to report/reveal such information.