Debt is like disease; people will run away from you! - ask DLF. The company is India’s largest property developer. In the present slow-down phase of the economy, DLF is struggling because of declining property prices and increasing debt service payments.

            DLF’s total debt amounts to around Rs 22500 crores, which is almost equal to the non-sovereign debt of Air India. Remember, King Fisher has a debt of Rs 7500 crores which is around one-third of DLF’s. The developer is India’s largest corporate debtor now.

            To escape from the debt ridden fundamentals, DLF has launched the strategy of selling its non-core assets including hospitality assets, convention centres etc. But insiders say the company’s effort to sell assets is not succeeding due to lack of interests from buyers.

            A major attempt was to sell Aman resorts International, its hospitality asset, has stalled due to lower-than-expected bids by shortlisted companies that include China's HNA Group. DLF is close to finalise a joint venture agreement with a Japanese company for the Indian developer's convention centre project in New Delhi in a deal worth Rs 800 crores.

            The market is keenly watching turnarounds of DLF. Share price has declined from the high of Rs1, 225 to Rs 212 on 27^th of January 2012.  In December 2011, rating agency CRISIL has downgraded DLF.

            DLF is waiting for a recovery in the economy as well as in the property market, and then debts can be comfortably serviced out. If it doesn’t happen, DLF may join Air India and Kingfisher in the group of corporate defaulters. 

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