The total debt of 14 listed real estate companies is more than double their cumulative sales, according to an analysis of the available data. The total debt of these companies, located in the main residential hubs of Mumbai, Delhi and the national capital region (NCR) and Bengaluru at the end of (FY16 stood at Rs 55,148 crore, as per data gathered from Bloomberg. In comparison, their cumulative annual sales were R25,438 crore. A large part of the total debt comprises DLF's massive leverage of Rs 26,895 crore. Without DLF, the total debt of the remaining 13 companies is Rs 25, 438 crore, more than double their annual sales of Rs 16,178 crore. This means that even at a nominal rate of interest of 13.5%, mid-sized companies will have to dish out almost Rs 3,400 crore as interest payment annually. The concerned companies include DLF, HDIL, Unitech, Ansal Properties, Vascon Engineers, Prestige Estates, Parsvnath, Godrej Properties, Oberoi Realty, DB Realty, Sobha Developers, Puravankara, Nitesh Estates and Orbit Corporation. According to an analyst, since these companies are barely making enough to meet their interest obligations and basic construction costs, they are actively banking on their relationships with specific lenders which insulates the sector from large scale defaults. Not surprising that for some of these firms, the interest coverage ratio has dropped to below one, which means, their operating profits will not be sufficient to meet their interest obligation. Although majority of the companies with a ratio below one are small cap companies, at least 20 BSE listed real estate companies have an interest coverage ratio of less than two, which are largely being considered as borderline cases by sector analysts. Some of the companies in this list include Parsvnath Developers, HDIL, DLF, Ansal Properties, Orbit, DB Realty etc. In order to tide over these difficult times, companies have had no choice but to rampantly refinance their loans, either from banks or from non banking financial companies (NBFCs). Last year in November, a report by Crisil said R30,000 crore worth loans faced high refinancing risks. This year, as pre-empted by the report, majority private equity (PE) deals as well as NBFC lending have been refinancing deals. Although data quantifying total refinanced loans is yet not available, most PE investments currently in the residential sector are refinancing deals, reiterated Vikas Chimakurthy, director at Kotak Realty Fund. Edelweiss, Altico and Piramal are among funds that have aggressively refinanced deals this year. For developers, these deals comes at a higher rate of interest. According to industry watchers, debt is being refinanced between 16% and 22%. Still, at a time when visibility on sales volume is so weak, cobbling together mezzanine finance has its perks. For instance, as Khushru Jijina, managing director at Piramal Fund Management said, should there be a delay in project, deadlines can be tailored. Asset sale, which is another way for developers to cash in are also expected to gain momentum in the coming months. Experts said there are several companies that have identified non core assets that they intend to sell. But according to Neeraj Sharma, director at Grant Thornton Advisory, negotiations for land sales take time to fructify. It is not easy to agree on pricing when the market is in a downturn, Sharma added.